Stamp Duty

Stamp duty January 2016

Property value  Stamp duty rate for owner-occupiers  Stamp duty rate for second property/buy-to-let 
(No duty payable properties costing under £40,000)
Up to £125,000 Zero 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% 5%
The next £675,000 (the portion from £250,001 to £925,000) 5% 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% 13%
The remaining amount (the portion above £1.5 million) 12% 15%

The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporate entities or funds making significant investments in residential property. The government will consult on the policy detail, including on whether an exemption for corporate entities and funds owning more than 15 residential properties is appropriate.

The stamp duty regime was overhauled last year and so-called “cliff edges” in the system were removed. These had triggered large tax bills, based on the entire value of a property, as soon as the purchase price breached them.

It had led to the bunching of properties for sale just below each threshold.

To replace that, increasing rates were applied to portions of a properties value so that tax bills rose gradually. The overall effect was to lower the stamp duty bill on all properties below £937,500 in value.