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What is Stamp Duty Land Tax and When do I pay it?

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Stamp Duty Land Tax or SDLT is a tax levied by the government and paid by anyone buying (or leasing) land or buildings in England & Wales with a capital value in excess of £125,000 or net present rental value over the term of the lease of £125,000.

The tax is payable within 30 days of the transaction and is calculated based upon the purchase price of the property. The amount due is calculated on a sliding scale as follows:

£0 – £125,000 = Nil£125,001-£250,000 = 2%£250,001-£925,000 = 5%£925,001-£1,500,000 = 10%£1,500,001 and Over = 12%

The appropriate SDLT Rate is applied to each band as appropriate and so the buyer of a property bought for say £600,000 would pay SDLT calculated as follows:

£0 – £125,000 = £125,000 x 0% = £0£125,001 – £250,000 = £124,999 x 2% = £2,500£250,001 – £600,000 = £349,999 x 5% = £17,500SDLT Due= £20,000

Stamp Duty is payable by the buyer and in most cases the buyer’s solicitor will deal with the paperwork. Even if you do not have to pay SDLT you will, in most cases, still have to inform the revenue of the transaction.

There are certain exclusions and exemptions to SDLT including when a property is gifted or left in a will or where part of a property is transferred from one spouse to another during divorce. For more details go to the HMRC Fact Sheet here.

Click here to see the new Stamp Duty Tax changes for First-Time Buyers as of November 2017.

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