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
• No SDLT is payable on a freehold property costing £40,000 or less unless the acquisition is part of a linked transaction, if the property is a leasehold, the same limit applies and the annual rent must also be less than £1,000 to avoid a charge.
• A higher additional 3% rate of SDLT applies on the purchase of second home or if a dwelling acquired by a Non-Natural Person. 
  • See SDLT & dwellings: Higher rates.
• First-time buyers receive a 3% discount on the purchase of a home costing £500,000 or less.
  • See: SDLT first-time buyers relief.

• Companies: higher value 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:
    • Companies.
    • Partnership with corporate members.
    • Collective investment schemes.
    • See SDLT: Residential property higher rates
    • See Annual Tax on Enveloped Dwellings (ATED) 
• SDLT is also payable on the net present value of any rents payable for leasehold residential property.
  • See SDLT: leases
• Non-resident purchasers of UK residential property are subject to a surcharge.
• Properties purchased with a Freeport tax site can be exempt from SDLT.

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

• Land and Buildings Transaction Tax (LBTT) replaced SDLT for properties in Scotland since 1 April 2015.
• Welsh Land Transaction Tax (LTT) applies since 1 April 2018 for properties in Wales.

Coronavirus: temporary extension to the nil rate threshold 

Between July 8 2020 to 31 March 2021 a temporary extension to the nil rate threshold (to £500,000) applies to residential property for both basic SDLT and higher rates due to the coronavirus. See SDLT: Summer economic update. It was announced at Budget 2021 that this would be extended to 30 June 2021 at the same rate, with a £250,000 limit to apply between 1 July 2021 and 30 September 2021. This is included in draft Finance Bill 2021.

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. This was updated on 3 June 2021 to include delays caused by government imposed restrictions or public authority action which prevented 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.

Small Print and Links

Small Print and Links

SDLT: Stamp Duty Land Tax (subscriber's guide)
What are the SDLT rates? What is exempt from SDLT? What reliefs are available?

SDLT & residential property: Higher rates
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge

HMRC SDLT rates and thresholds (these also give you the rates for leases)

SDLT legislation Finance Act 2003 Part 4.  Section 55 contains the rates chargeable.

Legislation relating to the higher rate will be included at Section 56A and Schedule 5A.

Also see Finance Act 2016 Part 8: sections 127 & 128.