What is Stamp Duty Land Tax (SDLT)? What is the rates of Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is paid on the purchase of an interest in land as a percentage of the purchase consideration. Different rates apply according to the type of property and the type of purchaser.

SDLT rates

Residential Property rates

From 8 July 2020 to 31 March 2021

 

Band: market price

£

Basic SDLT rate Higher SDLT rate First Time Buyer

Up to 500,000

0% 3% 0%

500,001 – 925,000

5% 8% 5%

925,001 – 1,500,000

10% 13% 10%

1,500,001 and over

12% 15% 12%

 

From 1 April 2016 to 7 July 2020

 

Band: market price

£

Basic SDLT rate

Higher SDLT rate

Property costs £40,000 or less

0% 0%

0 -125,000

0%

3%

125,001 – 250,000

2% 5%

250,001 – 925,000

5% 8%

925,001 – 1,500,000

10% 13%

1,500,001 and over

12% 15%

 

First Time buyers

From 22 November 2017 to 7 July 2020

Proportion of consideration   Rate
0-300,000 0%
300,001-500,000 5%

 

Non-UK residents from April 2021

 

Band: market price

£

Non-resident SDLT rate

Property costs £40,000 or less

0%

0 -125,000

5%

125,001 – 250,000

7%

250,001 – 925,000

10%

925,001 – 1,500,000

15%

1,500,001 and over

17%

 

Companies & non-natural persons: residential property subject to the ATED charge 

Cost

SDLT

rate

Over £500,000 15%

 

  • Non-natural persons include:
    • Companies.
    • Partnership with corporate members.
    • Collective investment schemes.


How SDLT works

Apply the rates specified to the proportion of the purchase price falling within each band.

E.g. A house purchased on 30 June 2020 for £950,000 by a buyer (who is not subject to the higher charge) will attract SDLT of £38,750.

Proportion of consideration   Rate

Amount

£

0 -125,000 0% 0
125,001 – 250,000 2% 2,500
250,001 – 925,000 5% 33,750
925,001 -950,000 10% 2,500
Total   £38,750

 

Non-residential property rates

The SDLT regime for non-residential and mixed-use property changed to a banding system on 17 March 2016.

Non-residential property includes:

  • Commercial property such as shops or offices.
  • Agricultural land.
  • Forests.
  • Any other land or property which is not used as a dwelling.
  • Six or more residential properties bought in a single transaction.
  • A mixed-use property is one that incorporates both residential and non-residential elements.

Non-residential rates are as follows: 

Band: market price £ 

Non-residential 

0-150,000

0%

150,001 - 250,000

2%

Over 250,000

5%

 

 

SDLT At a glance

  • SDLT is calculated on a banding system which was introduced from
    • 4 December 2014 for residential property and
    • 17 March 2016 for non-residential and mixed-use property.
    • See SDLT: Subscriber guide
  • A higher additional 3% rate of SDLT applies on the purchase of second home or if a dwelling acquired by a non-natural person. 
  • First-time buyers receive a 3% discount on the purchase of a home costing £500,000 or less.
  • Companies: residential property subject to the ATED charge 


    • Where a company, or other non-natural person, acquires residential property costing more than £500,000, a 15% SDLT rate is charged.
    • The 3% higher rate surcharge will not apply where the 15% rate applies.
    • Non-natural persons include:
  • SDLT is also payable on the net present value of any rents payable for leasehold residential property.

Since 1 April 2018 SDLT only applies to properties in England and Northern Ireland.

Coronavirus: temporary reduced rate

Between July 8 2020 to 31 March 2021 a temporary reduced rate applies for both basic SDLT and higher rates due to the coronavirus. See SDLT: Summer economic update.

Coronavirus: on 3 June 2020 HMRC updated their guidance on exceptional circumstances that allow refunds following a sale outside of the normal three-year limit to specifically include the impact of COVID-19 preventing the sale. See HMRC higher rates of SDLT

The change to the guidance in England and Northern Ireland follows the Scottish Parliament temporarily extending its refund period for land and buildings transaction tax from 18 months to three years.

Time limits and penalties

The deadline for filing an SDLT Return and paying any tax due is 14 days (30 days to 1 March 2019) from the effective date of the transaction.

There is no penalty for late payment but interest is charged from the due date up to the payment date.

Penalties for late filing:

  • Within three months of the filing date fixed penalty £100.
  • Between three and 12 months of the filing date fixed penalty £200.
  • More than 12 months after filing date tax geared penalty up to 100% in addition to the fixed penalty.

Tax geared penalties of between 0% and 100% apply if errors are made in a document which leads to a loss of tax, see Penalties: Errors in returns and documents.

See: SDLT: Amending returns

Special SDLT rules

  • If two or more dwellings are acquired Multiple Dwelling Relief can be claimed. 
  • Two more transactions which form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser are caught by the Linked Transactions rules.

Comments (2)

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I wish to ask a question about stamp duty for companies. I don't know if this is the right platform to do so but as you have a section about stamp duty, I thought I would ask.

My question is about the higher rate of 15% where the property price...

I wish to ask a question about stamp duty for companies. I don't know if this is the right platform to do so but as you have a section about stamp duty, I thought I would ask.

My question is about the higher rate of 15% where the property price exceeds £500,000. Can you tell me if this rate applies to the whole purchase price or just the amount in excess of £500,00. In other words, if the property costs £530,000, would the company pay 15% on £530,000 or just £30,000?

Thanks in advance.

Kim

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This comment was minimized by the moderator on the site

If you have a tax query, why not go to http://www.VtaxP.co.uk and raise a support ticket.

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