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Robert Irving Burns

Stamp Duty Guide

Stamp Duty Land Tax – often known simply as Stamp Duty or shortened to SDLT – is a tax in England and Northern Ireland paid by purchasers of land or property which is over a certain value.

Everything you need to know

When do you have to pay SDLT?

There are a variety of scenarios where you must pay Stamp Duty and the threshold for payment is a purchase price of *£250,000 for residential properties and a minimum threshold of *£150,000 for non-residential land and properties, as well as any mixed-use transactions.

You must pay SDLT when:

  • You purchase a freehold property.
  • You purchase a new or an existing lease.
  • Purchase a property through a shared ownership scheme.
  • Transfer land or property in exchange for payment, for example, you buy a share in a house or take on a mortgage.

Working out how much SDLT you owe:

In order to work out how much Stamp Duty you owe, you must first work out the chargeable consideration which is usually the amount of money which was spent on purchasing or transferring the land or property. However, it is important to take into account that the chargeable consideration is not always purely monetary. Properties and land can be exchanged for a number of other things including goods, release from a debt, transfer of a debt, or works and services. Sometimes payment can involve a variety of different forms with part of the transfer having a monetary value, and part taking another form which can sometimes complicate Stamp Duty calculations.

Please note that SDLT does not apply if you receive the property as a gift and there is no chargeable consideration.

To calculate how much Stamp Duty you owe for your transaction, you can use HMRC’s Stamp Duty Calculator which will tell you the total which must be paid.

Chargeable Consideration:

The chargeable consideration includes any assets purchased as part of the land or property.

These can include:

  • Fixtures and fittings including kitchen and bathroom fitting excluding curtains, carpets, and free-standing furniture.
  • Buildings and structures which form part of the land such as outbuildings, annexes, and any other structures.
  • Intangible assets such as the value of goodwill attached to the property or a Lord of the Manor title attached to a piece of land.

When the sale includes payment for items which are not part of the chargeable consideration such as moveable furniture, the purchaser and the vendor must agree a fair and reasonable value for the assets which can then be subtracted from the chargeable consideration.

Special Rates:

The SDLT rules and rate calculations change for:

  • Corporate bodies.
  • Shared ownership properties.
  • Companies and trusts buying residential property.
  • Purchases which mean you own more than one property.
  • Multiple purchases or transfers between the same purchaser and vendor.
  • People who are buying six or more residential properties in a single transaction.

There are also special rates in place for people buying their first home in order to help first time buyers get onto the property ladder. First time buyers can claim relief so they do not pay tax on the first *£425,000 and *5% on the portion from £425,001 to £625,000. However, if the purchase price for your property is over £625,000 the special rates do not apply and you must follow the same rules as people who have purchased a home before.

In addition, investors can claim multiple dwellings relief when purchasing properties which are located within the same block.

Higher Rates for additional residential properties:

You will have to pay *3% in addition to the normal SDLT rates if your purchase means you will own more than one residential property. However, you will not pay the extra 3% SDLT if the property which you are purchasing is replacing your primary residence and this has already been sold.

If there is a delay in selling your old residence and your new home completes first, you must pay the higher rate as you will own two residential properties. However, you may be able to get a refund from HMRC if you sell your previous primary residence within 36 months.

If you have bought a residential property before, you can use our table to help work out your Stamp Duty:

Residential Property Stamp Duty Land Tax (SDLT) Rates
Property/Lease Premium or Transfer Value SDLT Rate
Up to £250,000 0%
The next £675,000 (the share of the total from £250,001 to £925,000) 5%
The next £575,000 (the share of the total from £925,001 to £1.5m) 10%
The remaining amount above £1.5m 12%

To work out commercial and mixed-use SDLT rates please our helpful table below:

Commercial Property Stamp Duty Land Tax (SDLT) Rates
Property/Lease Premium or Transfer Value SDLT Rate
Up to £150,000 0%
£100,000 (the portion from £150,001 £250,000) 2%
The remaining amount (the portion above £250,000) 5%

How and when to pay SDLT:

You must send a Stamp Duty return form to HMRC within 30 days of completion of your transaction. If you have a solicitor or conveyancer, they will usually file your return and pay the tax on your behalf, adding the payment to their fees. In addition, they will also claim any relief you are eligible for and ensure you are not paying too much Stamp Duty.

If this is not done for you, you can file a return and pay the tax yourself.

*figures quoted on November 2022