Standard Rate
Most property transactions are subject to the standard rate of Stamp Duty Land Tax. This is the rate payable when you are selling your current home and buying another. This rate also applies if you do not currently own a property, but have done so in the past.
The amount of tax is payable based upon the purchase price of the property, and is charged as a percentage of the overall total across several different bands. The rates payable are as follows:
|
Property Price
|
Stamp Duty Rate
|
|
Up to £250,000
|
Zero
|
|
Portion from £250,001 to £925,000
|
5%
|
|
Portion from £925,001 to £1.5 Million
|
10 %
|
|
Remaining amount above £1.5 Million
|
12%
|
To use a purchase price of £300,000 as an example, you would pay no tax at all on the first £250,000 of the purchase price, and then 5% on the final remaining amount up to £300,000. This would come to an overall SDLT amount of £2,500.
Higher Rate
The Higher Rate of SDLT is charged on ‘second homes’. The most common example would be a Buy to Let/Investment property, but there are several other situations in which a property may be classed as ‘second home’. If anyone involved in the purchase is named on the deeds to another property, anywhere else in the world, then the higher rate of SDLT would apply.
The rules do make a concession, however, for those who own additional properties but wish to move house. If you own a buy to let for example, but plan on selling your current home and purchasing a new one, then the Standard Rate of SDLT applies. The properties being bought and sold must both be intended as your ‘main residence’, where you personally live and spend the majority of your time, however, in order to qualify.
The amount of tax is payable based on the purchase price of the property, and is charged as a percentage of the overall total across several different bands. The rates payable are as follows:
|
Property Price
|
Stamp Duty Rate
|
|
Up to £250,000
|
5%
|
|
Portion from £250,001 to £925,000
|
10%
|
|
Portion from £925,001 to £1.5 Million
|
15%
|
|
Remaining amount above £1.5 Million
|
17%
|
To use a purchase price of £300,000 as an example, you would pay 5% on the first £250,000 of the purchase price and then 10% on the final remaining amount up to £300,000. This would come to an overall SDLT amount of £17,500.
First Time Buyers
First Time Buyers benefit from a reduced rate of SDLT when purchasing their first property. To qualify for the lower rate, everyone involved in the purchase needs to be a first-time buyer – if any of you have owned a property before, then the standard rates of SDLT would apply.
Under the first-time buyer rate, you do not pay any tax at all on properties purchased up to £425,000, and then pay a reduced rate up to £625,000. If you purchase a property for more than £625,000 then you do not receive any first-time buyer relief and the Standard Rate of SDLT applies.
|
Property Price
|
Stamp Duty Rate
|
|
Up to £425,000
|
Zero
|
|
Portion from £425,001 to £625,000
|
5%
|
If you have any queries about how the SDLT rates might apply in your case, please contact a member of our New Business Team who would be more than happy to help.
Find out how much stamp duty you will pay with our handy stamp duty calculator.
