What is Stamp Duty Land Tax?
You pay Stamp Duty Land Tax if you buy a property or land in England and Northern Ireland at a price over a set threshold. SDLT is payable on freeholds. leaseholds, shared ownerships, and property where ownership is transferred. Use our Stamp Duty Land Tax Calculator below to work out how much tax you will need to pay.
Stamp Duty Land Tax Calculator
How much Stamp Duty Land Tax will I need to pay?
You pay Stamp Duty Land Tax on property purchases from £125,000 (or £300,000 for most first time buyers). Please use our Stamp Duty Land Tax Calculator above to work out how much you will need to pay based on your property purchase.
Stamp Duty Land Tax – Residential Property Rates
| Property or lease premium transfer value | SDLT Rate |
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| 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% |
Who pays Stamp Duty Land Tax?
Stamp Duty Land Tax is paid in most cases by the new owner of the land or property.
Family gifts to cover stamp duty land tax are acceptable, as is the payment of stamp duty land tax made by builders on a new property.
When do I need to pay Stamp Duty Land Tax?
Stamp Duty Land Tax must be paid on the date of completion of your purchase – therefore sufficient funds must be lodged with your Solicitor prior to that date.
You cannot extend your mortgage to borrow funds to cover your Stamp Duty Land Tax.
How much Stamp Duty Land Tax will a first-time buyer need to pay?
First-time buyers have an additional allowance so that if they purchase property for up to £500,000, the first £300,000 is free of Stamp Duty Land Tax.
From the £300,000 threshold to £500,000, Stamp Duty Land Tax rates for first-time buyers are set as per standard rates.
A first-time buyer buying at a price over £500,000 will pay standard rates across the whole price.
How much is higher rate Stamp Duty Land Tax?
Where a buyer already owns a property or share of a property worth £40,000 or more anywhere in the World, then buys a second property, they can be liable to pay a higher rate of Stamp Duty Land Tax.
Higher rate Stamp Duty Land Tax is currently 5% of the purchase price in addition to the standard rate. This can be paid by:
- someone buying a second home
- someone buying a property to let out
- someone buying a home for friend or family to use
- a company buying a property
A homeowner, who is moving home and sells their property at the same time, or before their new purchase with not pay the higher rate Stamp Duty Land Tax.
A homeowner, buying a new home and selling their previous home within 36 months of the new purchase will pay higher rate Stamp Duty Land Tax – once the sale of the previous home is complete, the higher rate Stamp Duty Land Tax can be reclaimed.
Do you have to pay Higher Stamp Duty Land Tax?
Use our interactive flowchart to find out.Is the property being purchased replacing your main residence which is being sold?
Yes
Yes but the main residence has not yet been sold
No
Stamp Duty Land Tax for joint purchasers
Joint purchasers are treated as one party for stamp duty land tax, therefore:
To obtain first-time buyers rates, all purchasers must be first-time buyers.
If any of the purchasers is buying a second property or not replacing their main home higher rate stamp duty land tax could be payable.
If any of the purchasers is non-UK resident, the 2% surcharge could be payable.
Please use our Stamp Duty Land Tax calculator above to work out how much Stamp Duty you will need to pay.
Purchasers who are married or in a Civil Partnership and SDLT
Married purchasers, or purchasers in a Civil Partnership, will be treated as a single unit for Stamp Duty Land Tax purposes, even if one Partner is not involved in the purchase.
Stamp Duty Land Tax and Transfer of Equity
Do you need to pay SDLT on Transfer?
Stamp Duty Land Tax on a purchase is a known cost for most property buyers. However, what many people struggle to understand is the Stamp Duty Land Tax implications when all or part of the value of a property is transferred to them. For example, is there tax to pay if your spouse owns a property outright and wishes to gift you a half share?
These situations come under the Stamp Duty Land Tax rules entitled: Transfer of ownership of land or property.
Monetary value
The Stamp Duty Land Tax rules state that tax will need to be paid when all or part of an interest in a property is transferred and anything of monetary value is given in exchange. Giving something of monetary value in exchange is a ‘chargeable consideration’ which triggers the tax.
Chargeable consideration
A chargeable consideration does not necessarily mean that money changes hands. You could exchange property for goods, in recognition of work or services provided, or simply on the basis that you take on part of the debt. If the chargeable consideration exceeds the Stamp Duty Land Tax threshold, tax could be due. If it does not, there will be no tax to pay.
Example – under the Stamp Duty Land Tax threshold
Let’s assume we have a property worth £150,000 with a remaining mortgage of £100,000. The owner wishes to transfer a half share of the property to their partner and their partner agrees to pay cash for half of the equity (£25,000) and take responsibility for half of the outstanding mortgage (£50,000).
The chargeable consideration would be the cash paid £25,000, plus the debt liability taken on £50,000 – a total of £75,000. Since this figure is below the Stamp Duty Land Tax threshold there will be no tax to pay.
Although there is no tax to pay a Stamp Duty Land Tax return still needs to be completed.
Example – property changes hands
A couple marries and one spouse owns a property worth £750,000 with a £550,000 mortgage outstanding. The property is transferred into joint names and the new spouse takes on half of the mortgage (£275,000).
The chargeable consideration is the liability that the spouse takes on for the mortgage and that is the amount (£275,000) on which Stamp Duty Land Tax is due. Since that figure is above the Stamp Duty Land Tax threshold, tax will be payable, in this case, 5% between £250,000 and £275,000 – a bill of £2,500.
Gifting a property
If properties are transferred by way of a gift and there is no ‘consideration’, then Stamp Duty Land Tax would not apply – there is of course a potential liability to inheritance tax should the donor die within seven years.
Divorce
If you divorce (or dissolve a civil partnership) you do not pay Stamp Duty Land Tax if the property is being transferred as part of a court order or agreement. This also applies to a legal separation or if a marriage is annulled. Even if the value of the property exceeds the Stamp Duty Land Tax threshold there is nothing to pay and there is no need to tell HMRC about the transfer.
This does not apply when Partners who are not married (or in a civil partnership) separate.
Transferring in or out of a company
If land or property is transferred in or out of a limited company, tax will be due on the market value not any consideration given. This is an important issue for buy to let investors moving investment property in this way.
Further guidance on this matter can be obtained on the HMRC website.
Of course, anybody transferring ownership of land or property should speak to their legal representative about the implications in relation to Stamp Duty Land Tax.
Special rates of Stamp Duty Land Tax
There are different calculations of stamp duty land tax for some buyers including:
- Corporate purchasers
- Purchase of 6 or more residential properties in one transaction
- Shared ownership properties
- Multiple purchase or transfers
- Trusts purchasing property
SDLT – Important note
Before committing to purchase or transfer of property you should speak to your Solicitor to:
Confirm the stamp duty land tax due
Confirm you have the funds to cover the cost of the tax