Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property and different values of transaction.

The tax rate and payment threshold can vary according to whether the property is in residential or non-residential use, and whether it is a freehold or leasehold. SDLT relief is available for certain kinds of property or transaction.

SDLT rates for residential property

The table below applies for all freehold residential purchases and transfers and the premium paid for a new lease or the assignment of an existing lease. (If the property will be used for both residential and non-residential purposes the rates differ - please see the section 'SDLT for non-residential or mixed use property').

New leases

If the transaction involves the purchase of a new lease with a substantial rent there may be an additional SDLT charge to that shown below, based on the rent. See the next section and further table 'SDLT on rent for new leasehold properties (residential)' for more detail.

Purchase price of residential property

SDLT %

£0 - £125,000

0%

£125,001 - £250,000

1%

£250,001 - £500,000

3%

£500,001 - £1 million

4%

Over £1 million to £2 million

5%

Over £2 million - from March 2012

7%

Over £2 million (purchased by certain persons including corporate bodies) - from March 2012

15%

If the value is above the payment threshold, SDLT is charged at the appropriate rate on the whole of the amount paid. For example, a house bought for £130,000 is charged at 1 per cent, so £1,300 must be paid in SDLT. A house bought for £350,000 is charged at 3 per cent, so SDLT of £10,500 is payable.

£2 million threshold for wholly residential property

From 22 March 2012 SDLT on residential properties over £2 million is charged at 7 per cent It does not apply to non-residential or mixed-use properties.

If you exchanged contracts before the higher rate came into force on 22 March 2012) the 5 per cent rate will apply. This only applies where the contract is unconditional and unaltered on or after 21 March 2012.

Higher rate for corporate bodies

From 21 March 2012 SDLT is charged at 15 per cent on interests in residential dwellings costing more than £2 million purchased by certain non-natural persons. This broadly includes bodies corporate, for example companies, collective investment schemes and all partnerships with one or more members who are either a body corporate or a collective investment scheme. There are exclusions for companies acting in their capacity as trustees for a settlement and property developers who meet certain conditions.

If you exchanged contracts before the higher rate charge came into force on 21 March 2012, the 5 per cent rate will apply. This only applies where the contract is unconditional and unaltered on or after 21 March 2012.

Properties bought in a disadvantaged area

If the property is in an area designated by the government as 'disadvantaged' a higher threshold of £150,000 applies for residential properties.

Disadvantaged areas - residential land or property SDLT rates and thresholds

Purchase price/lease premium or transfer value

SDLT rate

Up to £150,000

Zero

Over £150,000 to £250,000

1%

Over £250,000 to £500,000

3%

Over £500,000 to £1 million

4%

Over £1 million to £2 million

5%

Over £2 million from 22 March 2012

7%

Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012

15%

Read more about Disadvantaged Areas Relief

Further information about SDLT on rent - new residential leasehold purchase and SDLT rates for non-residential or mixed use properties is available on the HM Revenue & Customs website at http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm#1.

 

 

 

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