What is Stamp Duty Land Tax (SDLT)?
Estimated reading time – 6 minutes
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 property purchase is more than a certain cost.
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. The rules are slightly different and you can find out more here.
What are the new stamp duty rules and when did they change?
As of 23 September 2022, the government has introduced a change to stamp duty for both first time buyers and those moving house. The changes include 0% on the first £250,000. Previously this was 0% on the first £125k and 2% between £125,001 to £250,000. And for first time buyers you will pay no stamp duty up to £425,000. Previously this was set at £300,000.
Moving home Stamp Duty
If you’re moving home and purchase a property for £300,000 in November 2022, the stamp duty you owe will be calculated as follows:
- 0% on the first £250,000 = £0
- 5% on the remaining £50,000 = £2,500
- total stamp duty = £2,500
First time buyer Stamp Duty
If you’re a first time buyer and purchase a property for £450,000 in November 2022. The stamp duty you owe will be calculated as follows:
- 0% on the first £425,000 = £0
- 5% on the remaining £25,000 = £1,250
- total stamp duty = £1,250
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
A full list of exemptions can be found here.
When do you have to pay Stamp Duty Land Tax?
If you’re planning on completing a sale over the value of £250,000 and are not a first time buyer, you must 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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This article was written on 04 November 2022; all information was correct at the time of writing.
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