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8

2

UK property taxes

The proposed mansion tax would create an additional financial burden for home owners, especially in

parts of the UK that already have higher costs associated with moving into and living in family homes. A

mansion tax would add to already high levels of taxation levied via stamp duty and council tax.

Higher property prices, especially in London, have increased the number of homes that fall into one of

the higher stamp duty bands. The Stamp Duty Land Tax (SDLT) rate is charged on qualifying property

purchases and is based on the purchase price of the property, as shown below.

Table 1: SDLT rates in the UK

Source: HM Revenue and Customs

Out of the studied properties in London, in 2016 20% would be subject to a 4% stamp duty if they were

to be bought. By 2020, the figure increases by 10 percentage points to 30% unless there are changes to

the stamp duty bands. The percentage of London homes that are not subject to a stamp duty payment,

decreases from 0.8% to 0.2% in the 2016-2020 period.

Table 2: Number and percentage of London properties in each SDLT band, 2016 and 2020

Source: Land Registry, Cebr analysis

Purchase price of property

Rate of SDLT (percentage of the total purchase

price)

£0 - £125,000

0%

£125,001 - £250,000

1%

£250,001 - £500,000

3%

£500,001 - £1 million

4%

£1 million - £2 million

5%

Over £2 million

7%

SDLT Rate

No. of homes in 2016 (%)

No. of homes in 2020 (%)

0%

25,524 (0.77%)

5,319 (0.16%)

1%

696,863 (21%)

292,802 (8.82%)

3%

1,638,184 (49.37%)

1,607,566 (48.45%)

4%

674,238 (20.32%)

985,229 (29.69%)

5%

202,429 (6.1%)

305,253 (9.2%)

7%

80,763 (2.43%)

121,831 (3.67%)

Total

3,318,000

3,318,000

© Centre for Economics and Business Research