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Last edited 15 Feb 2021

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.