UK PAYE Tax Calculator / Salary Calculator

The number 1 free UK salary calculator tax calculator since 1998. Calculate salary, national insurance, HMRC tax and net pay

Guide to the Changes to Stamp Duty

The Listentotaxman guide to the changes to Stamp duty from the 4th of Dec 2014.

If you are buying a house after the 3rd of December 2014, chances are you will be paying a lot less in Stamp Duty, thanks to George Osborne's surprise announcement today. Stamp Duty will see a total revamp. The old flat rate system has been replaced by a gradually increasing tax, tied to the increasing value of the property. Those who will gain from the new changes are basically anyone buying a house for less than £930,000.

Up until now, once you went over a threshold, you paid tax on the whole purchase price at that higher rate of tax.  For example, on a £260,000 home, you paid 3% on the whole price = £7,800. Regardless of the fact that the rate from £125,001 to £250,000 was 1%, and only increased to 3% after the value went over £250,001.

The new system uses thresholds, rather like the PAYE tax system, to establish how much stamp duty is owing. The first £125,000 paid for a house has no tax owing on it. Once you go over that £125,000 threshold, you pay tax at a rate of 2% on the amount above £125,000, up to £250,000, and so on. So for the same example as used above, a property valued at £26,000, there is no tax up to £125,000, it's 2% from £125,001 to £250,000, 5% from £250,001 to £260,000. The total Stamp Duty owing under the new system is £3,000. This means a saving of £4,800. See the table below for a better idea of the savings to be had under the new system. 

New Stamp Duty Tax Bands and Rates

Property Value Bands Rate of Tax charged
£0 - £125,000 0%
£125,000-£250,000 2%
£250,000 - £925,000 5%
£925,000- £1.5 million 10%
£1.5 million + 12%


Old v New Stamp Duty System- Comparison of How Much Tax Due

House Value Old System  New System
£100,000 £0 £0
£125,000.01 £1,250.01 £0.02
£150,000 £1,500 £500
£200,000 £2,000 £1,500
£250,000 £2,500 £2,500
£300,000 £9,000 £5,000
£350,000 £10,500 £7,500
£400,000 £12,000 £10,000
£450,000 £13,500 £12,500
£500,000 £15,000 £15,000
£750,00 £30,000 £27,500
£1,000,000 £40,000 £43,750
£2,000,000 £100,000 £153,750

The new Stamp Duty system will be in place throughout the UK from the 4th of December 2014. There may be changes to the thresholds and rates in Scotland after April 1st though. 

This article was published in our Guides section on 03/12/2014.

Some Guides you may be interested in

  • Company car tax for business owners What are the tax implications of buying a company car from a tax perspective? Take a look at our indepth analysis.
  • Landlords - Should you incorporate or not? Iain Rankin our Property Tax Expert, from TaxKings, takes a run through the decision making process to help you weigh up what the appropriate course of action is for you
  • What’s Required For Your First Digital VAT Return The government has started to roll-out Making Tax Digital (MTD) in a bid to engineer the UK tax system so that it embraces the online era. I hope this guide will help you understand the implications.
  • Scotland Vs England And Wales: What Are The Differences In Tax? There are significant differences to how much tax you pay in Scotland in comparison to England.
  • AirBnb vs long-term-rentals For the holiday maker & professionals alike, it’s safe to say that short-term let platforms - such as AirBnb, Flipkey, or Homeaway - have been a bit of a game changer.
  • Bookkeeper v Accountant Are you paying your accountant to prepare your books? Could you save some money by hiring a bookkeeper? Clare Doherty explains the key differences…
  • 5 Tax changes that may affect you this year Following the start of a new tax year, it’s always useful to stay abreast of changes to your responsibility. Certain legislative updates in 2019 have been overshadowed by the spectre of Making Tax Digital for VAT, causing smaller (but significant) changes to be overlooked.
  • Top Ten Claimable Expenses for Limited Companies Let’s start with a thought experiment. I’ll set the scene. You’re a limited company owner, and you, as the director, are the sole employee. You also - understandably – love learning about tax. You open up the Monday morning paper to find some exciting news - HMRC has hinted there are going to be some big changes in the upcoming UK budget.....
  • Salary vs Dividends A guide to tax efficient remuneration for Limited Company directors for 2019/20.
  • What changes to buy-to-let mortgage interest tax relief for landlords? Undoubtedly the biggest source of tax confusion for prospective landlord clients that we speak to here at TaxKings relates to the changes to tax relief for residential landlords, introduced by the UK Government in April 2017.

More from our Guides section