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What is UK Stamp Duty Land Tax (SDLT)?

by Nikki Dale -

Stamp Duty (SDLT) is a lump-sum property and land tax payable by people who buy property or land in the UK and Northern Ireland – Wales and Scotland have their own property tax system.

SDLT is payable when the sale has completed and is calculated at varying percentage(s) based on the value of the property.

There are two buyer-bands a primary residential purchase would fall into:  the Mover or the First-time Buyer.  And if you were buying a second property, holiday home, buy to let, you would pay the “Mover” additional property rates, with a surcharge.

Please note temporary changes to UK Stamp Duty:

Between 8th July 2020 – 31st January 2021 there will be a temporary cut to Stamp Duty Land Tax on residential property, increasing the zero-rate band to £500,000 and saving purchasers up to £15,000.

READ ARTICLE: Stamp Duty Holiday makes property investment a no-brainer

NB: Charts below are not valid between 8th July 2020 – 31st January 2021

Stamp Duty Land Tax for residential / first time buyers 

 

A Mover

Stamp Duty was payable by movers when the property was £125,001 or over.

Property Purchase Price Single Property Rates
£0 to £125,000 0%
£125,0001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1,500,000 10%
£1,500,001 + 12%

 

A First-Time Buyer

Stamp Duty was payable by first-time buyers when the property was £300,001 or over. If the property was £500,001 or over it was the same tax payment as a “Mover”.

Property Purchase Price Single Property Rates
£0 to £300,000 0%
£300,0001 to £500,000 5%
£500,001 to £925,000 5%
£925,001 to £1,500,000 10%
£1,500,001 + 12%

 

The tax for all would be calculated on fixed percentage above the threshold, until the next threshold.  So, for example, if your first-time buyer property cost £400,000, you would only pay tax on the part of the price that falls between £300,001 and £400,000.

Stamp Duty Land Tax for second home buyers or buy to let investors

 

New government legislation came in in 2016, whereby second home buyers and landlords buying property for buy to let purposes, would have to pay a higher Stamp Duty Land Tax.

Property Purchase Price Additional Property Rates
£0 to £125,000 3%
£125,0001 to £250,000 5%
£250,001 to £925,000 8%
£925,001 to £1,500,000 13%
£1,500,001 + 15%

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