Autumn Statement 2014

Stamp duty and property

Stamp duty land tax (SDLT)

The calculation basis for SDLT on residential property will be changed with effect from 4 December 2014. Instead of the ‘slab’ approach, in which one rate of tax applies to the entire property value, tiered rates will apply to the portion of the purchase price within each of a set of five bands, as shown in the table below.

Property value (£) Rate (%)
0-125,000 Nil
125,001-250,000 2
250,001-925,000 5
925,001-1,500,000 10
1,500,001 + 12

The net effect will be to reduce SDLT for 98% of homebuyers: only properties valued at more than £937,500 will attract a higher SDLT charge than at present.

Illustrative SDLT liability and effective rate before 4 December 2014 and from 4 December 2014

Property value (£) SDLT due before 4 December 2014 SDLT due from 4 December 2014 Change in SDLT due (£)
150,000 1,500 500 -1,000
200,000 2,000 1,500 -500
250,000 2,500 2,500 0
300,000 9,000 5,000 -4,000
400,000 12,000 10,000 -2,000
500,000 15,000 15,000 0
600,000 24,000 20,000 -4,000
750,000 30,000 27,500 -2,500
1,000,000 40,000 43,750 3,750
1,500,000 75,000 93,750 18,750
2,000,000 100,000 153,750 53,750

Transitional rules will allow buyers who have already exchanged on a home but have not completed before 4 December 2014 to choose whether to pay SDLT under the existing or new rules.

There are no changes to the SDLT rules for non-residential property or for residential properties bought using corporate envelopes.

Annual tax on enveloped dwellings (ATED)

The rates of ATED for properties worth over £2 million will be increased by 50% above inflation. From 1 April 2015 to 31 March 2016, the charge on residential properties owned through a company and worth over £2 million but not more than £5 million will be £23,350; for properties worth over £5 million but not more than £10 million the charge will be £54,450; for properties worth over £10 million but not more than £20 million the charge will be £109,050; and for properties worth over £20 million the charge will be £218,200.

 

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