SDLT Stamp Duty Land Tax

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Stamp Duty Calculator

If you’re buying a residential property or piece of land in England or Northern Ireland, you’ll have to pay Stamp Duty Land Tax (SDLT) if your purchase is over the threshold of £250,000.

Our Stamp Duty calculator lets you know the amount of tax you’ll be liable to pay. It’ll work out how much Stamp Duty you’ll owe, whether you’re a first-time buyer, moving home, or buying an additional property. 

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a tax, or a sum of money, you must pay to the government when you purchase a property in England or Northern Ireland, costing more than £125,000.

It was introduced in place of what was known as Stamp Duty in 2003. SDLT is slightly different to stamp duty in that it is a transfer tax charged on “land transactions”. 

You pay SDLT to cover the cost of the legal paperwork involved in transferring property deeds from one person’s name to another. The main document involved in the ownership title of the property is the ‘deed’. It includes a search to ensure you are buying the property from the rightful owner. (In Scotland, you pay “Land and Buildings Transaction Tax” and in Wales you pay “Land Transaction Tax”).

So if you are purchasing a new property after the sale of your current one, this is an expense you must factor in.

Stamp Duty Fees

Stamp Duty charges are quite straight-forward at first glance. However, different types of ownership incur their own charges. The most straightforward calculation of stamp duty is for those moving home as residential buyers. This is where home movers are simply changing their only home. The cost of Stamp Duty for first time buyers also differs, depending on the value of the property. Stamp Duty charges begin at 2% of the price on the portion of a property selling for anything above £125,000, rising to 5% on the next £675,000, 10% of any further £575,000 and 12% on any price above £1.5 million. So, in summary, when you purchase as your main residence and you have owned a property before, you will pay the following rates on each portion of the property price:

  • On the portion costing between £0 and £125,000 you pay 0%
  • On the portion between £125,001 and £250,000 you pay 2%
  • On the portion costing between £250,001 and £925,000 you pay 5%
  • On the portion costing between £925,001 and £1,500,000 you pay 10%
  • On the portion costing over £1,500,000 you pay 12%
SDLT is calculated on the part of the property purchase price falling within each band.Here is an example:

  • Purchase price: £275,000
  • On the portion worth £0-£125,000 = 0% tax = £0
  • On the portion worth £125,000.01-£250,000 = 2% tax = £2,500
  • On the portion worth £250,000.01-£275,000 = 5% tax = £1,250
  • Total SDLT: £3,750

Stamp Duty On Second Homes

Maybe you are buying a second home. If so be aware that buyers of additional residential properties, such as second homes and buy-to-let properties, must pay an extra 3% in Stamp Duty on each band on top of current rates. An increased rate applies to properties bought for £40,000 or more. If your new property is to be your new main residence but you had a hold up in selling your original main residence, you will be charged the higher Stamp Duty rates as technically, you will own two properties. However, if you manage to sell or even give away your original home within 3 years of buying your new home you can apply for a refund for the higher rate that you paid.

Conditions apply, but you can request a refund if:

  • you sell your original home within three years,
  • you make the claim within three months of selling your original home, or within 12 months of filing your SDLT tax return.

Residential And Mixed Use

There are also different rules for what is termed ‘non-residential’ and ‘mixed use land’. This could be commercial property such as retail units and offices,  agricultural land and forestry, any non-residential land or six or more residential units that are bought in one transaction.

Mixed use refers to any property that falls into residential and non-residential categories, such as flats above shops. The threshold for these properties begins at £150,000: between £150,000 and £250,00, the Stamp Duty rate is 2%, and any amount above £250,000 incurs a charge of 5%.

Claiming Back Stamp Duty?

It is possible, under certain circumstances, to apply to HMRC for a refund of the additional rate of stamp duty You can do this if you sell your previous home within 3 years of paying the higher rate of Stamp Duty. You can only do this if this is your main residence.

Other circumstances of SDLT Relief:

  • You are a first time buyer
  • When you buy more than one dwelling where a transaction or a number of linked transactions include freehold or leasehold interests in more than one dwelling.
  • If a building company or property trader buys a home from someone who is buying a new home from them, the property bought by the house builder or property trader is exempt from SDLT if certain conditions are met.
  • If an employer or property trader buys an individual’s house because they’re moving with their work, the purchase is exempt from SDLT if certain conditions are met.
  • A property is bought by a local authority as a compulsory purchase.
  • Companies can claim relief within the same group that buy or sell property to or from each other.
  • As long as certain conditions are met, charities can get relief from SDLT when they buy land and property for charitable purposes.
Conditions apply to all of the above.

When Do I Pay Stamp Duty?

Anyone buying a property for whatever amount, even if it is below the threshold, must fill in and send an SDLT return and pay the tax within 30 days of their completion date. Some buyers may be able to complete the paperwork themselves, but in the majority of cases it is advisable to leave this in the care of an experienced conveyancing solicitor.

When Is Stamp Duty Not Payable?

If you buy a property for less than £125,000 then stamp duty is not payable. Other circumstances in which Stamp Duty is exempt or can be reduced are when:

  • You would be paying only slightly over a rate band. If you pay only marginally over a lower rate band, ask the seller or estate agent if they would accept a slightly lower price. This could be the difference between selling or not selling. They are most likely prepared for this question.
  • The transfer of property is due to separation or divorce. If you’re divorcing or separating from your spouse or partner, there’s no Stamp Duty payable if your proportion of the home’s value is transferred to them.
  • Transferring of deeds. If you intend to transfer the deeds into the name of someone else they won’t owe any Stamp Duty. Though, if you exchange properties with another person, you will both pay Stamp Duty on the property you receive based on its market value.