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Thu 21 Jan 2016
UK Stamp Duty – What changes to expect in 2016?
Stamp Duty Land Tax is a progressive tax which is paid when purchasing a residential property over £125,000 in England, Northern Ireland and Wales (separate Land and Buildings Transaction Tax in Scotland). New Stamp Duty Land Tax rates were introduced in 2014's Autumn Statement, introducing a sliding system based on thresholds and dependent on a property price.
How has UK Stamp Duty changed since 2014?
Before 2014 a 'slab structure' was in place with buyers paying a rate based on the ENTIRE property purchase price. The new rates are now payable only on the PORTION of a property price which falls within each band. As with every tax, there are those who will be better and worse off compared to the previous system.
Stamp Duty Tax Rates as of December 2014
| Brackets | Rate | |
| £0 - £125,000 | 0% | |
| £125,001 - £250,000 | 2% | |
| £250,001 - £925,000 | 5% | |
| £925,000 - £1.5m | 10% | |
| £1.5m+ | 12% |
How to calculate the new Stamp Duty rate
So, if you bought a property for £350,000 you would pay no stamp duty on the first £125,000, then 2% on £125,001 to £250,000 and 5% on the amount above £250,000.
Buy-to-let and second homes Stamp Duty 2016
From April 2016, property buyers in England and Wales will have to pay an additional 3% on each stamp duty band. Please see below.
Buy-to-let and second home Stamp Duty tax bands
| Brackets | Standard Rate | Buy-to-let/second home rate (April 2016) |
| Up to £125,000 | 0% | 3% |
| £125 - £250,000 | 2% | 5% |
| £250 - £925,000 | 5% | 8% |
| £925 - £1.5m | 10% | 13% |
| over £1.5m | 12% | 15% |
| Source: HMRC |
Who pays Stamp Duty?
Stamp Duty is paid by everyone purchasing a property in England, Northern Ireland and Wales above £125,000, including overseas buyers.
When is Stamp Duty paid?
You must pay stamp duty to the HMRC 30 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don't miss the deadline.
How often does Stamp Duty change?
New stamp duty rates and thresholds have historically been introduced every 25 years with the latest changes effective of December 2014.
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