SDLT on residential property overhauled overnight
Wed 03 Dec 2014
A major change announced at today’s Autumn statement is an overhaul of the stamp duty land tax rates that apply to residential purchases. This introduces a marginal system with each SDLT rate payable only the portion of purchase price falling within each rate band, instead of the current ‘slab’ system. Set out below are the new rates below, with the current SDLT and land and buildings transaction tax (‘LBTT’) rates by way of comparison.
This change aligns the SDLT rate system with the LBTT system (to be introduced for Scottish property purchases from 1st April 2015) but the thresholds are different and SDLT has an intermediate 5% rate.
The new system replaces the current rules which tax the entire purchase price to the rate for the particular band within which it falls.
Mazars’ stamp taxes expert Matt Scott-Pearce comments:
NOTE OF RATE SYSTEMS
| SDLT rates from 4th December 2014Residential property Part of purchase price | Rate |
| Up to £125,000 | 0% |
| Between £125,000 and £250,000 | 2% |
| Between £250,000 and £925,000 | 5% |
| Between £925,000 and £1,500,000 | 10% |
| Above £1,500,000 | 12% |
| SDLT rates from 4th December 2014Commercial propertyEntire purchase price | Rate |
| Up to £150,000 | 0% |
| Between £150,000 and £250,000 | 1% |
| Between £250,000 and £500,000 | 3% |
| £500,000 or more | 4% |
Proposed Land and Buildings Transaction Tax rates from 1 April 2015
| Residential | Commercial | ||||
| Part of purchase price . | Rate . | Part of purchase price . | Rate . | ||
| Up to £135,000 | 0% | Up to £150,000 | 0% | ||
| £135,001 to £250,000 | 2% | £150,001 to £350,000 | 3% | ||
| £250,001 to £1,000,000 | 10% | Over £350,000 | 4.5% | ||
| Over £1,000,000 | 12% | ||||
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