Stamp Duty

Stamp Duty Land Tax (SDLT) is payable to HMRC when buying property or land over a certain value. SDLT is payable to HMRC in the UK with the exception of Scotland where they have their own Land and Buildings Transaction Tax (LBTT) and Wales have Land Transaction Tax (LTT).

Stamp Duty Land Tax is levied progressively, in a similar way to income tax. Calculating your liability to this progressive tax can be complex. It can depend on the type of property you are buying, and whether it is your principal private home, a second or third home or a commercial or mixed-use property. Below we break down what Stamp Duty you would be charged depending on a variety of factors.

Purchasing a Sole Residential Property

If you are purchasing a residential property, are not a first-time buyer, are a UK resident and this will be the only property you will own and (whether you live in it or not), then you will pay Stamp Duty if the transaction price is above £250,000. Thereafter, you pay tax as follows:

• The next £675,000 (the portion from £250,001 to £925,000) – 5%

• The next £575,000 (the portion from £925,001 to £1.5 million) – 10%

• The remaining amount (the portion above £1.5 million) – 12%

Purchasing as a First-Time Buyer

There is a discount for first-time buyers. A first purchase of up to £425,000 no longer attracts the tax, and the existing rate of 5% applies on the portion from £425,001 to £625,000. The relief does not apply to properties above £625,000.

Second Home, Buy-to-let Property or Holiday Home

Anyone purchasing a second home or buy-to-let property above £40,000 (unless this is the only property you own) will have to pay an additional 3% on top of the amounts detailed on the left.

If you are purchasing a new property which you intend to use as your only home, but haven’t yet sold your previous house, you would have to pay the higher rates detailed on the left – however, if you sell your old house within 36 months you could get a refund.

Non-Residential or Mixed Use Property

Purchasing a property with significant land holdings can attract a different stamp duty calculation. If the property is classified as nonresidential or mixed-use land and property there is a stepped regime as follows:

• Up to £150,000 – 0%

• Above £150,000 and up to £250,000 – 2%

• Above £250,000 – 5%

Our agency teams are highly knowledgeable and are often asked to provide advice about SDLT so please do get in touch with any questions you may have. To make life a little easier, our website has an online Stamp Duty calculator to cut through the often confusing world of SDLT and save you time – you can find it here:

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