Stamp Duty Land Tax (SDLT) is a tax paid by anyone who purchases a property or land in England, Wales and Northern Ireland.
The existing SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.
If the Property is freehold then following SDLT rates are applicable:
|Residential Property Rates||Non-residential and mixed use property rates|
|Property or lease premium or transfer value||SDLT rate||Property or lease premium or transfer value||SDLT rate|
|Up to £125,000||Zero||Up to £150,000||Zero|
|The next £125,000 (the portion from £125,001 to £250,000)||2%||The next £100,000 (the portion from £150,001 to £250,000)||2%|
|The next £675,000 (the portion from £250,001 to £925,000)||5%||The remaining amount (the portion above £250,000)||5%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%||–|
|The remaining amount (the portion above £1.5 million)||12%|
An additional 3% on top of the normal SDLT rates will apply if you buy an additional residential property means you’ll own more than one.
If the property is leasehold then you pay SDLT on lease premium using above rates plus:
- 1% of the portion over £125,000 of net present value (NPV) i.e. rent over the life of the lease (in case of residential Property)
- 1% of the portion from £150,001-£5,000,000 and 2% of the portion above £5,000,000 of NPV i.e. rent over the life of the lease (in case of non-residential Property)
An SDLT is required to be submitted to HMRC and payment of tax to be made within 30 days of completion of the transaction. Failure in meeting the obligation will result in penalties and interests.
You don’t have to pay SDLT or file a tax return if:
- no money or other payment changes hands for a land or property transfer
- property is left to you in a will
- property is transferred because of divorce or dissolution of a civil partnership
- you buy a freehold property for less than £40,000
- you buy a new or assigned lease of 7 years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000
- you buy a new or assigned lease of fewer than 7 years, as long as the amount you pay is less than the residential or non-residential SDLT threshold
- you use alternative property financial arrangements, e.g. to comply with Sharia law