Stamp Taxes On Property

Due to the complex nature of stamp duty and tax planning this information is offered as a guide only and professional advice should be taken before taking any action. Stamp Duty on the purchase or transfer or shares and securities at a value over £1000 is calculated at 0.5%, rounded up to the nearest £5.

Stamp Duty Land Tax (SDLT)

Residential Property

From 22nd March 2012 to 3rd December 2014

Transfers of property were subject to Stamp Duty Land Tax at the following rates:
Value up to £125,000* Nil
£125,001 to £250,000 1%
£250,001 to £500,000 3%
£500,001 to £1,000,000 4%
£1,000,001 to £2,000,000 5%
Over £2,000,000 7%

* The limit for residential property in disadvantaged areas is £150,000. Special rules applied for new zero-carbon homes. A 15% rate applied to properties over £500,000 (£2,000,000 prior to the 20th March 2014) purchased by certain "non-natural persons".

From 4th December 2014 onwards

Transfers of property are subject to Stamp Duty Land Tax on the portion of the purchase price that falls into each of the following rate bands:
Value up to £125,000* Nil
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1,500,000 10%
Over £1,500,000 12%

* The limit for residential property in disadvantaged areas is £150,000. Special rules apply for new zero-carbon homes. A 15% rate applies to properties over £500,000 purchased by certain "non-natural persons".

Where contracts were exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, you can choose whether you follow the new or the old rules.

First Time Buyers*

From 22nd November 2017 onwards

Transfers of property are subject to Stamp Duty Land Tax on the portion of the purchase price that falls into each of the following rate bands:

Value up to £300,000

Nil

£300,001 - £500,000

5%

Over £500,000

Standard rates apply

* A first time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence.

Non-Residential Property

Up to and including 16th March 2016

Transfers of property are subject to Stamp Duty Land Tax at the following rates:
Value up to £150,000 Nil
£150,001 to £250,000 1%
£250,001 to £500,000 3%
Over £500,000 4%

From 17th March 2016 onwards

Transfers of property are subject to Stamp Duty Land Tax on the portion of the purchase price that falls into each of the following rate bands:
Value up to £150,000 Nil
£150,001 to £250,000 2%
Over £250,000 5%

Lease Rentals

SDLT is charged according to the Net Present Value (NPV) of all the rental payments over the term of the lease, with a single rate of 1% on residential NPVs over £125,000 and on non-residential NPVs over £150,000. From 17th March 2016, there is a new 2% rate for high value leases with NPVs over £5m.

VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease Premiums

SDLT on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £1,000 annually is also payable).

Buy to Let / Additional Residential Properties

Purchases before 1st April 2016

Where Buy to Let properties or additional residential properties are purchased before 1 April 2016, SDLT is charged at the same rates as Residential Property above.

Purchases on or after 1st April 2016

Additional SDLT rates have been introduced on Buy to Let or additional residential properties purchased on or after 1 April 2016. The full list of rates is as follows:

Transfers of property are subject to Stamp Duty Land Tax on the portion of the purchase price that falls into each of the following rate bands:

£0* - £125,000

3%

£125,000 - £250,000

5%

£250,001 to £925,000

8%

£925,001 to £1,500,000

13%

Over £1,500,000

15%

*Transactions under £40,000 are charged at 0%. This does not mean that the first £40,000 is taxable at 0%. If the purchase price is £45,000, the full £45,000 is charged 3% stamp duty land tax.

Please note from 22 November 2017 relief from the additional rate can be claimed in the following circumstances:

Welsh SDLT

The above rates will apply to Wales until SDLT is devolved to Wales on 1 April 2018.

Land and Buildings Transaction Tax (LBTT)

On 1 April 2015, SDLT in Scotland was replaced by Land and Buildings Transaction Tax (LBTT). LBTT is charged at different rates depending on the portion of the purchase price that falls into each of the following rate bands:

Residential Property

Value up to £145,000 Nil
£145,001 to £250,000 2%
£250,001 to £325,000 5%
£325,001 to £750,000 10%
Over £750,000 12%

First Time Buyers in Scotland*

Subject to approval from the Scottish Government, a First Time Buyers Relief will apply from the 2018-19 tax year for purchases of residential property in Scotland by first time buyers. The First Time Buyers Relief will allow first time buyers of residential property in Scotland where LBTT will apply to benefit from a 0% LBTT threshold on the first £175,000 of their purchase of residential property. The First Time Buyers Relief is subject to further consultation and so may be amended before implementation.

Non-Residential Property

Value up to £150,000 Nil
£150,001 to £350,000 3%
Over £350,000 4.5%

Lease Rentals for Residential Property

These are exempt from LBTT unless they are for longer than 175 years.

Lease Rentals for Non-Residential Property

Duty is charged according to the NPV of all the rental payments over the term of the lease, with a single rate of 1% on non-residential NPVs over £150,000.

Lease Premiums

LBTT on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £1,000 annually is also payable).

Buy to Let

Purchases before 1st April 2016

Where Buy to Let properties or additional residential properties are purchased before 1 April 2016, LBTT is charged at the same rates as Residential Property above.

Purchases on or after 1st April 2016

Additional LBTT rates have been introduced on Buy to Let or additional residential properties purchased on or after 1 April 2016. The full list of rates is as follows:

Transfers of property are subject to Land and Buildings Transaction Tax on the portion of the purchase price that falls into each of the following rate bands:

Value up to £40,000

Nil

£40,001 to £145,000

3%

£145,001 to £250,000

5%

£250,001 to £325,000

8%

£325,001 to £750,000

13%

Over £750,000

15%

*Transactions under £40,000 are charged at 0%. This does not mean that the first £40,000 is taxable at 0%. If the purchase price is £45,000, the full £45,000 is charged 3% LBTT.

Please contact us for further information

Disclaimer:  This App and its contents have been produced as a helpful reference point.  The information should be used as a guide only and your specific circumstances are best discussed directly with us.

No reliance should be placed on this material and no action should be taken without seeking the appropriate professional or legal advice. Although the authors make reasonable efforts to ensure the content of this App is accurate and up-to-date, the authors make no representations, warranties or guarantees that the content is accurate, complete or up-to-date and accept no responsibility whatsoever for any loss occasioned by anyone acting on information within this App.