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What is a Stamp duty?
Stamp Duty Land Tax (SDLT) is a tax levied on the buyer of residential property in the UK. A stamp duty holiday was in effect from 8 July 2020 to 30 June 2021, with stamp duty payable on purchases above £500,000. The threshold reduced to £250,000 from 1 July 2021 to 30 September 2021 and will be reduced to £125,000 from 1 October 2021. Stamp duty rates vary between 2% and 12% of the purchase price, depending on the value of the property purchased, the date of acquisition, and whether you are multiple homeowners.
Each threshold band will be subject to a 3% surcharge for those purchasing an additional residential property. If you are a landlord who is buying to let, you will be required to pay SDLT if the income from a short term property let (up to seven years), residential tenancy, or lease above the threshold.
From 1 April 2021, the rates mentioned below include a 2% extra for non-UK residents.
Applicable tax rates on Residential Purchases
England and Northern Ireland Stamp Duty Land Tax Rates:
Rates from 1 October 2021
| Property or lease premium or transfer value | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| above£1.5 million | 12% |
Also See: SDLT changes for mixed-use buildings
Rates from 1 July 2021 to 30 September 2021
| Property or lease premium or transfer value | SDLT Rate |
|---|---|
| Up to £250,000 | 0% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| above £1.5 million | 12% |
Rates until 30 June 2021
| Property or lease premium or transfer value | SDLT Rate |
|---|---|
| Up to £500,000 | 0% |
| £500,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| above £1.5 million | 12% |
If this is your first home purchase
If you buy your first home after 1 July 2021, you may be eligible for a discount (relief). This means that you will be required to pay the following:
- There is no SDLT on purchases up to £300,000
- 5% SDLT on the amount between £300,001 and £500,000
You qualify if you and any other buyers you are buying with are first-time buyers. If the purchase price exceeds £500,000, you must follow the rules for previous property buyers.
Additional property purchases
Generally, those purchasing additional properties must pay a 3% surcharge on above mentioned SDLT rates. Additional properties in the nil rate category will have an effective rate of 3%.
If a buyer is purchasing a property as their main residence and has not sold their previous property on the day of the purchase, they will be required to pay the surcharge.
At dns, we have a specialist tax team that can advise you on SDLT rate bands. Book a free consultation now to know more about SDLT rates. You can call us on 03300 886 686 or email enquiry@dnsaccountants.co.uk.
Any questions? Schedule a call with one of our experts.
Owais Bombaywala
Working closely with individuals and businesses to help grow their business requires a significant amount of experience and industry knowledge. Owais is BA (Hons) Accounting and Finance and Member of ACCA. Besides being a compliance champion, he specialises in Property tax planning. With over 7 years of experience in Accountancy and Tax world, our clients count on us to give them timely and up to date advise to help them make the right move. Owais works closely with some of the DNS’s most valued clients to give them the confidence they need to focus on their business. He is known for his calm nature and proactive approach.
At DNS, we proud to be a modern and client centric firm. Our advise doesn’t just look at what’s best for your business moreover our aim is to help you achieve your personal goals.
Away from work, he resolve family disputes and provide care and support to elderly people. He is a founding member of Human welfare organisation Hounslow.
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Owais Bombaywala
Working closely with individuals and businesses to help grow their business requires a significant amount of experience and industry knowledge. Owais is BA (Hons) Accounting and Finance and Member of ACCA. Besides being a compliance champion, he specialises in Property tax planning. With over 7 years of experience in Accountancy and Tax world, our clients count on us to give them timely and up to date advise to help them make the right move. Owais works closely with some of the DNS’s most valued clients to give them the confidence they need to focus on their business. He is known for his calm nature and proactive approach.
At DNS, we proud to be a modern and client centric firm. Our advise doesn’t just look at what’s best for your business moreover our aim is to help you achieve your personal goals.
Away from work, he resolve family disputes and provide care and support to elderly people. He is a founding member of Human welfare organisation Hounslow.
