What is Stamp Duty Land Tax (SDLT)?
One we buy the house or in the process of buying the house we have questions like what the stamp duty is and do I have to pay the stamp duty.
In England or Northern Ireland, buyers are required to pay Stamp Duty Land Tax (SDLT) when purchasing property or land that exceeds a certain value. In Wales, this tax is called Land Transaction Tax (LTT), and in Scotland, it is referred to as Land and Buildings Transaction Tax (LBTT).
What is the amount of Stamp Duty Land Tax (SDLT) that I will be required to pay?
The amount of Stamp Duty Land Tax (SDLT) you owe is determined by a percentage of the purchase price of the land or property. This calculation takes into account the current SDLT rates established by the government, as well as any exemptions or tax relief you may be eligible for.
The amount you’ll pay depends on:
- – Whether the property is leasehold or freehold
- – If you’re a first-time buyer
- – If you’re buying an additional property
- – The amount you pay for the property.
The amount of stamp duty you will be required to pay can be determined by using HMRC’s Stamp Duty Land Tax (SDLT) calculator.
The stamp duty rates and thresholds provided in the table below are in effect for single residential properties bought from 23rd September 2022 onwards. A single property means it is the only residential property you possess following the completion of the sale (if you do own another property, you will usually incur an extra 3% on these rates – for instance, if you are a landlord with multiple properties). Please be advised that an additional 2% surcharge will be applicable if you are not ordinarily a UK resident.
| Property Value | Single Property SDLT | Additional Property SDLT |
| Up to £250,000 | 0% | 3% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5 million | 10% | 13% |
| £1.5 million upwards | 12% | 15% |
Will I be required to pay stamp duty on the complete amount?
In short, the answer is no! Stamp duty is comparable to income tax in that it is calculated in bands, rather than a uniform rate. This means that you may be subject to multiple stamp duty rates, each applicable to a specific portion of the transaction within a specific threshold.
Are there any exemptions for stamp duty?
Stamp duty tax does not apply to certain transactions, like the transfer of properties in divorce settlements or civil partnership dissolutions. Moreover, properties inherited through wills and transactions without chargeable consideration are exempt from this tax.
When and how should I be paying the stamp duty?
Ensure that you file a Stamp Duty Land Tax (SDLT) return with HMRC and clear any dues within 14 days of the purchase completion. Your solicitor or agent could handle the SDLT return submission, and you would then make the payment to them. Always confirm this arrangement with them and avoid presuming anything.
You can also send a SDLT return yourself online or by post, as well as paying the stamp duty directly to HMRC.
Is it necessary to submit a stamp duty return even if there is no payment required.
It is necessary to submit a return, even if you think that you will not have to make any payments towards stamp duty.
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Note: It must be noted that the information provided in all our blogs are solely for the awareness purposes and are designed with the intention to create an ease for the reader to understand the rules and their importance. However, it should never be considered as an ultimate replication of rules. RezEx Accountants (RezEx Ltd) does not own any responsibility for any unpleasant event that may arise due to misinterpretation of a specific part or whole of the information.
