UK Stamp duty reform

The new rules on stamp duty became effective on 4 December 2014.  The new system is a “progressive” one so that the stamp duty rates on each consecutive band pertaining to the price of the property apply rather than a single  rate applying to the entire purchase price based on the “top” band into which the price previously fell.

The new rates of stamp duty are based on the purchase price of property within each band:
The first £125,000 (£0 – £125,000)                     – 0%
The next £125,000 (£125,001 – £250,000)          – 2%
The next £675,000 (£250,001 – £925,000)        – 5%
The next £575,000 (£925,001 – £1,500,000 )      – 10%
The remaining amount (£1,500,001 and over)   – 12%

Example : If you buy a house for £275,000, the SDLT you owe is calculated as follows:

  • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the final £25,000 = £1,250
  • Total SDLT = £3,750

Higher rates for additional properties

You’ll usually have to pay 3% on top of the normal SDLT rates if buying a new residential property means you’ll own more than one.

You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase:

  • you’ll have to pay higher rates because you own 2 properties
  • you may be able to get a refund if you sell your previous main home within 36 months.

Special rates

There are different SDLT rules and rate calculations for:

  • companies
  • people buying 6 or more residential properties in one transaction
  • shared ownership properties
  • multiple purchases or transfers between the same buyer and seller (‘linked purchases’)
  • purchases that mean you own more than one property
  • companies and trusts buying residential properties

Contact RKG Consulting to find out more about stamp duty and property.

RKG Consulting provides tax, immigration and accounting solutions. Our principal adviser is a "Chartered Tax Adviser" and is also an OISC-licensed immigration practitioner. We can provide a seamless service incorporating both tax and immigration solutions. If you have any queries, please feel free to contact us by telephone: +44 77 66 828 851
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