Stamp duty land tax SDLT
Stamp duty land tax is payable on the purchase or transfer of property or land in the UK which has a value above a certain threshold. Therefore, it is a tax which arises on property transactions. Given the large amounts of money involved, it is important that it is fully factored into project appraisals.
The way in which the tax is calculated can vary according to a number of considerations, such as, whether the property which is the subject of the transaction is commercial or residential, is leasehold or freehold or is part of a series of associated transactions.
For transactions that are classified as 'non-residential' the rates of tax are as follows:
Property or lease premium or transfer value | SDLT rate |
Up to £150,000 | Zero |
The next £100,000 (the portion from £150,001 to £250,000) | 2% |
The remaining amount (the portion above £250,000) | 5% |
Whilst for transactions that are classified as 'residential' the rates of tax are as follows:
Property or lease premium or 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% |
[Rates current at September 2016.]
There will normally be a 3% additional charge on top of the normal SDLT rates if buying a new residential property means the owner will own more than one.
There are different rules and rates for:
- corporate bodies
- people buying 6 or more residential properties in one transaction
- shared ownership properties
- multiple purchases or transfers between the same buyer and seller (‘linked purchases’)
- companies and trusts buying residential property
NB: Scotland has its own Land and Buildings Transaction Tax, and in September 2016, the Welsh Government announced that it would introduce its own Land Transaction Tax, the first Welsh tax in 800 years.
In 2020, SDLT rates were temporarily reduced to boost the housing market following the COVID-19 outbreak. In October 2020, this reduction was extended to March 2021.
[edit] Related articles on Designing Buildings Wiki
- Company acquisitions in construction.
- Conveyancing.
- December 2020 GDP figures show construction vulnerable.
- Disbursement.
- Duty.
- Land.
- Net Present Value.
- Owner.
- Reservation agreement.
- Search fees.
- Tax on £2m plus residential properties.
- Taxation.
[edit] External references
- HMRC: Stamp Duty Land Tax.
Featured articles and news
Mental Health Awareness Week with ABS
Architects Benevolent Society programme of activity.
CLC publishes domestic retrofit competency framework
Roadmap of Skills for net zero.
May 13-19: Moving more for our mental health.
Understanding is key to conservation.
Open industry engagement survey seeks responses
Institutions and the importance of engagement.
National Retrofit Hub unveils new guide
Digital Building Logbooks and Retrofit: An Introduction.
Top 50 firms awarded 52bn of projects in the last year
New engineering data shows.
Enhancing construction site reporting efficiency
Through digitisation and the digital revolution.
Noise in the built environment
BSRIA guide TG 20/2021.
17,000 people suffer conditions as a result of exposure to excessive noise at work.
Turning down the noise: Auditory health
A pervasive risk with far-reaching consequences.
Getting the most out of heat pumps and heating
How heat pumps work and how they work best.
Plumbing and heating for successful retrofit and renovation
Low temperature underfloor systems and heat pumps.
Cost-of-living crisis and home improvement plans
Starting on the right footing and top tips for projects.
Delays on construction projects
Types, mitigation and the acceleration of works.
From Chaucer to Fawlty Towers.
Electrotechnical excellence, now open for entries.
Net zero electricity grids BSRIA guide NZG 5/2024
Outlining the changes needed to transition to net zero.
CIOB Global Student Challenge 2024
Universitas Indonesia wins for second year running.