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| Property price (£) | Rate (%) |
| 0-125,000 | 0 |
| 125,001-250,000 | 2 |
| 250,001-925,000 | 5 |
| 925,001-1,500,000 | 10 |
| Over 1,500,000 | 12 |
| Property price (£) | Rate (%) |
| 0-125,000 | 0 |
| 125,001-250,000 | 2 |
| 250,001-925,000 | 5 |
| 925,001-1,500,000 | 10 |
| Over 1,500,000 | 12 |
The stamp duty land tax (SDLT) regime affecting residential property is to be reformed at midnight tonight, following announcements made this afternoon by the chancellor, George Osborne.
Deloitte’s head of tax policy, Bill Dodwell, claimed this afternoon’s autumn statement will be “remembered for the overnight change to SDLT”, and suggested that Osborne had been “encouraged by Scotland” to abolish the “ancient slab-basis and move to a progressive system”.
Tax will be payable from 4 December on the portion of the purchase price that falls within each band, rather than at a single rate on the whole transaction value. The rates and thresholds are also to be amended.
Craig Leslie, head of stamp taxes at EY, agreed that the chancellor had taken his lead from Scotland’s government, but said the Scottish land and buildings transfer tax was “designed to produce a broadly revenue-neutral outcome compared with existing SDLT revenue yields”, while the new SDLT rates and banding system represents a “substantial tax cut worth hundreds of millions of pounds each year”.
The chairman of the Chartered Institute of Taxation’s property subcommittee, Brian Slater, insisted the progressive rate structure will be “both fairer and more sensible, preventing distortions in the market place and avoidance around the ‘break points’.”
Andrew Sneddon, head of tax at law firm Trowers & Hamlins, disagreed, claiming that increases to the SDLT cost of the most expensive homes will have an adverse effect on property values – especially in the London market.
But Paul Emery, stamp duty taxes partner at PwC, hailed “fantastic news for homeowners of property valued in the dead zones above the £125,000, £250,000 and £500,000 bands, where they have typically not been able to realise the full value of their homes.
“In future, sellers will benefit because they won’t be forced to drop their price around the cliff edges at £125,000, £250,000 and £500,000.”
