UK Stamp Duty Changes Autumn Statement 2014

Kaye & Carey have been reviewing the changes made to stamp duty following the Chancellor's Autumn Statement announced in the 2014 Autumn Statement.

Although additional tax is not something our vendors and buyers were hoping for there is a clear argument that something was going to change and this new set-up is the lesser of two evils, the mansion tax represented identifying and punishing high net worth individuals on an ongoing basis.

The new system also throws up some new opportunities for savvy investors looking to make the most of the Kensington, Chelsea, Knightsbridge and Belgravia residential marketplace, for example purchasing properties with a short lease could be very beneficial as this would result in lower costs and savings when purchasing an extended lease on your property at a later stage, something that many of the large estate holders offer on their properties.

Example: Purchase a property with less than 20 years left on a lease for around £500,000 and then purchase extended lease for around £500,000 would result in a saving.

- Stamp duty increases for properties over £2 million may result in a small slump in completed properties within this category however we would imagine that this would not remain like this for long as people will get used to it.

- Properties over £2 million which had offers on them prior to the changes in stamp duty are likely to split the difference between vendors and buyer.

Residential land or property SDLT rates and thresholds

Purchase price of property

Rate of SDLT

Up to £125,000


Over £125,000 to £250,000


Over £250,000 to £925,000


Over £925,000 to £1.5 million


Over £1.5 million


Example: A buyer exchanges contracts for the purchase of a house for £275,000 on 5 December 2014, with completion expected to in February 2015. Under the new rules the SDLT is calculated as follows:

0% on the first £125,000 = £0

2% on the next £125,000 = £2,500

5% on the final £25,000 = £1,250

Total SDLT payable = £3,750


Details on Stamp Duty can be found HERE.

Kaye & Carey’s own research shows that less than 1% of sellers withdrew from the market in the days following the Autumn Statement and those who remained on the market did not make any adjustment to the their asking price, the final quarter of 2014 also shows a 4% increase in the average amount of days a property remains on the market, indicating a continued market that is stabilizing possibly not strengthening.

Matthew Kaye a director from the agency went on to explain “Although more tax payable for our buyers and sellers can never be deemed as a good thing, overall we see this as having a limited impact on our marketplace as many of the homes we sell and let are in and around the many beautiful garden squares of Kensington, Chelsea and Knightsbridge and property supply chain is always going to be one of our key challenges, we did anticipate a change to the status quo and overall this seems to be the lesser of two evils, the mansion tax would have been an ongoing targeting process for high net worth individuals and of course this is not a good way to create investment and drive overseas monies into the UK”

Our outlook for 2015 continues to remain positive, with the pressure on oil prices and UK General Election not having a massive impact as the UK economy continues to grow and facilitate more local and European and US buyers.