SDLT is an extremely complicated area of tax with a constantly changing legislation.
What is SDLT?
Stamp Duty Land Tax (SDLT) is a tax that individuals or businesses must pay if they buy property or land over a certain price in England and Northern Ireland. The higher the price, the more SDLT there will be to pay. SDLT can be paid on residential and non-residential properties.
When do you pay SDLT?
- Buying a freehold property
- Buying a new or existing leasehold
- Buying through a shared ownership scheme
- Transferred land or property in exchange for debt (e.g., taking on a mortgage)
How much do you pay?
Residential property:
- Properties up to £250,000: 0% SDLT
- £250,001 - £925,000: 5%
- £925,001 - £1.5 million: 10%
- Above £1.5 million: 12%
First-time buyers
- Up to £425,000: 0% SDLT
- £425,001 - £625,000: 5%
- Above £625,000: Standard rates apply.
Non-residential property:
- Up to £150,000: 0%
- £150,001 - £250,000: 2%
- Above £250,000: 5%
Payment and filing
- The deadline to send an SDLT return to HRMC and pay the tax is within 14 days of completion
- This transaction is usually handled by your solicitor, agent, or conveyancer. If not, you must file and pay it yourself
- There are penalties if payments are late
What are some SDLT exemptions?
- No money or other payment changes hands for a land or property transfer
- Inherited property
- Property transferred from divorce settlements
- Charities buying for charitable purposes
- Property under £40,000
Higher rates for additional properties
If you're planning to purchase an additional property, including buy-to-lets and second homes, you must pay an extra 3% of the purchase price in Stamp Duty. This surcharge often causes confusion, making it essential to consult a specialist. This is particularly relevant for individuals looking to expand a rental portfolio or those replacing their residence without selling their current home. Contacting an expert ensures you understand the implications and pay the correct amount.
Have you overpaid SDLT? How are some of the ways we can help?
SDLT Refund Claim on Mixed-Use Property
HMRC's guidance states that the additional 3% SDLT surcharge does not apply to the purchase of mixed-use properties (a combination of residential and non-residential property) where Multiple Dwellings Relief (MDR) is claimed. MDR can be claimed when more than one dwelling is acquired in a single transaction or a mixed-use purchase involving more than one dwelling.
SDLT Refunds for Uninhabitable Buildings
If a property is deemed uninhabitable, this may affect the stamp duty you pay. According to the Health and Safety Executive, uninhabitable properties are those unfit for human occupation, lacking basic facilities, having severe structural issues, or posing major health hazards.
If you purchase such a property in this state, you may be eligible for an SDLT refund.
SDLT Refund Claim on Outbuildings
Outbuildings, such as barns on the grounds of your property, could reduce your SDLT liability. If you overpaid due to including outbuildings in the main property valuation, you might be able to claim an SDLT refund.
Get in touch today
Stamp Duty Land Tax is often misunderstood, with many overpayments resulting from reliance on HMRC’s basic Stamp Duty Calculator which is considered a “guide” by their own admittance, often used by solicitors, it can frequently give incorrect results due to not accounting for the over 50 reliefs and exemptions that are available. Frequent legislative changes further complicate matters for non-specialists.
If you believe you may have overpaid, it’s crucial to contact our expert team, whether you live in one property, own multiple properties, or have purchased land for development, our advisers will help determine if you have a valid claim.