Theresa Mills
Associate Solicitor
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Date Published:10 Mar 2016 Last Updated:25 Oct 2021

Changes to Stamp Duty Land Tax – 4 December 2014

Conveyancing - Residential Property

Changes to Stamp Duty Land Tax (SDLT) come into effect as of 4 December 2014.

Unlike before where a single rate would be charged on the value of the transfer, purchasers will now have to pay tax on bands of value as per the below table:

Price Band Tax payable
The first £125,000 0
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
£1,500,001 and upwards 12%

What is the effect of the changes?

This means that the first £125,000 of every purchase, irrespective of the overall value, is not subject to tax. For anybody purchasing a house for £937,500 or less there will either be a saving or no difference in the tax under the previous system.

However, for those purchasing above £937,500 the amount of tax payable has increased.

This becomes clearer by way of a worked example:

If the purchase price on a property is £260,000 the first £125,000 has no SDLT payable, 2% is payable on the next £125,000 (£2,500) and 5% is payable on the last £10,000 (£500) so the total SDLT payable under the new regime is £3,000. Under the old regime 3% would have been payable on £260,000 which would have been £7,800.

I exchanged on my property before 4th December 2014 but do not complete until after what tax do I pay?

If you fall into this category you are able to select which tax regime you use. Your conveyancer will be able to advise you as to which regime you will pay less tax on.

Further information can be found on the Government website.