The Chancellor’s Autumn Statement on 3 December 2014 saw the introduction of the biggest changes to the Stamp Duty Land Tax (SDLT) system since its implementation in 2003. The changes saw the abolition of the traditional “slab rate” approach to charging SDLT for sales of residential properties, and the introduction of a progressive “slice” charging system. From 4 December 2015, each rate of SDLT will apply only to the particular portion of the selling price to which it applies. The new SDLT rates are as follows:

  • Nil to £125,000
  • 2% to £250,000
  • 5% to £925,000
  • 10% to £1,500,000
  • 12% above £1,500,000

Where a property is being sold for £275,000, a rate of 0% will apply up to £125,000. A rate of 2% will apply for the next “slice” of the property up to £250,000 (£2,500), and a rate of 5% for the remaining £25,000 “slice” (£1,250). An example of how the new SDLT rates will apply is available here.

The rules relating to high value residential property acquired by a non-natural person (e.g. companies) are not affected by the SDLT changes. The 15% rate will continue to apply where the sale price is above £500,000 unless one of the SDLT reliefs apply.

The new rates apply only to wholly residential property in England and Wales (and in Scotland until April 2015). From 1 April 2015 the new Scottish Land and Buildings Transaction Tax is due to be introduced in place of SDLT, although the Scottish Government is presently reviewing its implementation as a result of the SDLT changes. The SDLT rates for commercial property have remained unchanged.

Following the implementation of the new SDLT rates many of the largest national estate agency chains have reported increased interest and levels of enquiries from potential buyers.