Stamp duty slab system to go, Autumn Statement announces
A major reform of stamp duty land tax for residential property transactions was announced in the Chancellor's Autumn Statement today. With effect from tomorrow (4 December 2014), the structure, rates and thresholds are being changed to deliver a more efficient and fairer system.
Under the new scheme, which will apply where purchases are completed on or after 4 December, each rate of the tax will only be payable on the portion of the property value which falls within the specified band, as opposed to the present system under which tax is charged on the full value of the property if the price reaches the relevant threshold.
The proposed rates are:
0% on any amount up to £125,000
2% on any amount over £125,000 up to £250,000
5% on any amount over £250,000 up to £925,000
10% on any amount over £925,000 up to £1,500,000
12% on any amount over £1,500,000
A similar charging structure principle is proposed for the land and buildings transaction tax which will replace stamp duty land tax in Scotland from 1 April 2015, when the Scottish Parliament takes responsibility for land transaction taxation, but the rates rise more steeply above the £250,000 level, with 10% being charged on any part of the purchase price above that amount, and the 12% band beginning at £1,000,000. The 0% band however extends to the first £135,000.
Commercial property transactions are unaffected by the Chancellor's announcement.