Budget 2015 – SDLT

Stamp Duty Land Tax

Fundamental changes were made to the rates of Stamp Duty Land Tax (SDLT) paid on residential property in the Autumn Statement, and the Chancellor has resisted the temptation to make any further changes. To recap what was announced in December 2014, the position is as follows:-

Under the previous rules, which ended on 3 December 2014, you paid this tax at a single rate on the entire price paid for the property. This could lead to large variations in the amount paid due to the so called “slab effect”.

For example, under the previous rules a person paying £250,000 for a property would pay 1% on the full purchase price, so a bill of £2,500. A person paying £250,001 for a property would have paid 3% stamp duty on the full cost, so a liability of £7,500. Your tax liability could therefore have been £5,000 higher, simply because you paid £1 more for the property.

The new rules have eliminated this problem. They introduced different rates of tax, and you are only required to pay SDLT on the amount of the price falling within a particular rate band. The new rates and bands are as follows:-

SLDT Rates

The Chancellor announced in December that 98% of home buyers would pay less tax SDLT under the new rules. This includes everybody who pays less than £937,500 for their new house, and also those who pay between £1million and £1,125,000.

The new rules state that if you are purchasing a mixed use property, where part of the property is used as a home and part is used as commercial premises the full amount will be charged under the commercial property SDLT rates. The rates and rules for commercial property have not changed so the existing slab rate of charging SDLT will continue to apply.

These SDLT rates will apply in Scotland until 1 April 2015 when they introduce the Land and Buildings Transaction Tax to replace Stamp Duty Land Tax.

The Land and Buildings Transaction Tax Rates to be used in Scotland after that date will be as follows:-

SLDT Rates Scotland

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Nov 25

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