Understanding the stamp duty changes announced by Osborne

By Michelle Rock

George Osborne announced stamp duty reforms in his Autumn Statement, with the new rates of tax taking effect on 4th December, but there is already some confusion about the changes.

In short, the majority of purchasers are now going to be paying less stamp duty as a result of the new rates. As before, no tax is paid on a property purchase involving a house costing £125,000 or less. The second tax band is reasonably simple, and involves 2 per cent tax being paid on the portion of the house price that is above £125,000 up to £250,000. Those two tax brackets will account for the large majority of house purchases in Northern Ireland over the next months, and while the higher tax bands are largely academic, are worth explaining all the same.

There are 3 more tax bands for properties above £250,000 and the important thing to note is that the purchaser effectively pays different rates of tax on different portions of the purchase price. So anything between £125,000 and £250,000 is charged at 2 per cent stamp duty. In addition to that amount, anything between £250,001 and £925,000 is paid at 5 per cent. In addition to that anything between £925,001 and £1.5million is charged at 10 per cent, and anything over £1.5million is charged at 12 per cent. A breakdown of how the tax is worked out can be seen by using the Inland Revenue Stamp Duty calculator

Essentially, someone buying a property at £510,000 would pay £15,500 in stamp duty worked out as follows:

Purchase price bands (£)  Percentage rate (%) SDLT due (£)
Up to 125,000 0 0
Above 125,000 and up to 250,000 2 2,500
Above 250,000 and up to 925,000 5 13,000


Anyone wanting to work out stamp duty themselves can use the following table:

£125,000 or under  £0
£125,001- £250,000 2% on the amount over £125,000
£250,001 - £925,000 £2500 plus 5% on the amount between £250,000 and £925,000
£925,001 - £1,500,000 £36250 plus 10% on the amount between £925,000 and £1,500,000
£1,500,001+ £93750 plus 12% on the amount over £1,500,000


If you are buying, selling or remortgaging a property in Northern Ireland, and want to speak to a conveyancing solicitor, contact Wilson Nesbitt in Belfast by calling 0800 840 9290.

If you require a purchase solicitor fee quotation that includes the new rate of stamp duty tax click here.



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