Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) is a tax placed on property purchases in England and Northern Ireland. You must pay SDLT on purchases of freehold, leasehold and shared ownership as well as transfers of equity in exchange for payment or taking on mortgage debt.

You must pay Stamp Duty within 30 days of completion. The value upon which your SDLT is calculated is known as the “consideration” and is normally (but not always) just the property value.

Residential SDLT rates

Up-to-date rates of Stamp Duty can be found here. The government has a handy calculator so you can work out what your SDLT liability might be.

Property, lease premium or transfer valueSDLT rate
Up to £250,0000%
The next £675,000 (£250,001 to £925,000)5%
The next £575,000 (£925,001 to £1.5million)10%
Anything above £1.5million12%
SDLT rates from Gov.UK as at October 2023

New build residential leasehold

For new build leasehold properties, there are two elements that both make up the consideration: –

  • the purchase price (“lease premium”), and
  • the total rent over the lifetime of the lease (“net present value”).

SDLT upon the lease premium is simple to calculate using the residential rates table. If the net present value is over £250,000, you must pay 1% SDLT on the portion above £250,000. The rent would have to be extremely high in order to trigger this.

SDLT when owning multiple properties

If the purchase results in you or your spouse/civil partner owning multiple properties, you have to pay a 3% premium on top of the residential rates.

WARNING! The 3% premium doesn’t just apply to buy-to-let landlords and those with holiday homes! If you buy a property as a main residence but cannot sell your previous residence, you are still classed as owning two properties. However, if you sell your former residence within 3 years (sometimes longer in exceptional circumstances) you can apply for a Stamp Duty refund.

SDLT rates for First Time Buyers

The government regularly adjusts the Stamp Duty rules for First Time Buyers because it wants to make it easier for First Time Buyers get on the property ladder. The current rules provide SDLT “relief” in the form of an extended nil-rate band, so First Time Buyers pay: –

  • no SDLT up to £425,000
  • 5% SDLT from £425,001 to £625,000

For properties above £625,000, relief does not apply.

In order to qualify for relief, all parties purchasing (including spouse/civil partner) must be First Time Buyers. This means that nobody must ever have owned or had a share in any property anywhere in the world.

Other scenarios

There are different rules and rates applicable for a few other situations, such as large-scale purchases of 6 or more properties, international buyers, commercial or mixed-use property. If you don’t feel like your situation is covered above, either check the government website or give us a call.