What is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a tax on property or land bought in England and Northern Ireland. You’ll have to pay it if your purchase costs over a certain price.
If you’re buying property or land in Scotland, you won’t have to pay stamp duty. Instead, you’ll have to pay a Land and Buildings Transaction Tax. If you purchased a house in Wales and the sale was completed on or after 1st April 2018, you will have to pay Land Transaction Tax.
What are the stamp duty rates on residential properties?
You’ll typically have to pay stamp duty if the residential land or property that you’re buying costs over £125,000. If you’re buying non-residential land and properties, it’s £150,000.
How much you’ll have to pay for a residential property depends on what price band your purchase is in.
If you’re a first-time buyer, you may be able to claim tax relief which excludes you from paying stamp duty for properties or land that cost up to £300,000. You’ll still have to pay stamp duty of 5% for the remaining amount of the property if it costs between £300,000 and £500,000.
If you’re buying a second property (for example, a second home, or an additional home to let out) you’ll have to pay an extra 3% in stamp duty. If there’s an overlap in time between selling your old home and purchasing your new one, you may still have to pay second-home stamp duty rates until your current property is sold.
Do I have to pay stamp duty?
You must pay stamp duty on any property or land purchase if you’re:
- Buying freehold property
- Buying a new or existing leasehold, or
- Buying a property via a shared ownership programme
You may also have to pay stamp duty if you have full or part ownership of a property or land transferred to you, for example, from marriage, civil partnership, divorce, joint ownership, inheritance or as a gift.
Stamp Duty Land Tax exemptions
- Charities may be able to get relief from stamp duty when they buy land and property for charitable purposes.
- Properties bought through Right-to-Buy initiatives may qualify for stamp duty discounts.
- Registered social landlords may be able to get stamp duty tax reductions when buying land or property.
- Zero-carbon homes (and flats) under £500,000 are exempt from stamp duty. Any valued over £500,000 will have their stamp duty bill cut by £15,000.
When do you have to pay Stamp Duty Land Tax?
You’ll have to pay stamp duty within 14 days of completing your purchase. If you have a solicitor, agent or conveyancer, they’ll typically file the return on your behalf. Late or non-payment may incur penalties and interest on the tax.
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