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Stamp Duty Land Tax Guide

Buying property or land over a set price (e.g. the current threshold) will be subject to some kind of Stamp Duty Land Tax in the United Kingdom. The information in this section explains when you need to pay SDLT, the rates for residential and non-residential properties, and how to qualify for reliefs and exemptions.

When is Stamp Duty Land Tax Payable?

Even though modern versions no longer require a physical stamp, you would need to pay the tax any time you:

  • Buy an existing or new leasehold.
  • Buy a property through one of the shared ownership schemes.
  • Have land or property transferred to you in exchange for payment (e.g. buying a share in a house or taking on a mortgage).
  • Buy a freehold property.

Note: The tax on property and land differs in Scotland (e.g. Land and Buildings Transaction Tax) and in Wales (Land Transaction Tax) on sales completed since the 1st of April 2018.

Stamp Duty Thresholds 2022

SDLT starts to apply once the purchase price reaches the relevant threshold. Thus, buying land or property for an amount under the threshold means you would not need to pay Stamp Duty Land Tax.

  • The SDLT threshold for non-residential land and properties is £150,000.
  • The SDLT threshold for residential properties is £125,000 (it changed on the 1st of July 2021).
SDLT Relief for First-Time Buyers

A discount is available for first-time buyers from the 1st of July 2021. As a result, you may pay less or no tax whatsoever, if (both):

  • The purchase price of the property is not more than £500,000.
  • You, along with anyone else you buy with (e.g. shared ownerships), are all first-time buyers.

Important: Buying a first home before the 8th of July 2020 means you would still qualify for the same Stamp Duty relief.

Property Purchases from 1st of October 2021
  • Threshold £125,000 for residential properties.
  • Threshold £150,000 for non-residential land and properties
Property Purchases from 1st of July to 30th of September 2021
  • Threshold £150,000 for non-residential land and properties.
  • Threshold £250,000 for residential properties (until it changes on the 1st of October 2021).
How Much Will Stamp Duty Be?

The amount that you need to pay will depend on whether the land or property that you are buying is classed as residential or non-residential or mixed-use.

Even so, there are different rates of Stamp Duty Land Tax when buying a residential property. It will depend on whether you are:

  • A first-time buyer (e.g. have not previously owned a home).
  • The owner of a property already and the new purchase is for an additional property.
  • Not a United Kingdom resident.

In some cases, you can claim relief to reduce the amount of tax due. Typical examples include buying a property for the first time and purchasing ‘multiple dwellings’ (more than one property).

Note: HM Revenue and Customs (HMRC) have a facility that lets you calculate Stamp Duty Land Tax to work out how much tax you may need to pay.

Sending an SDLT Return to HMRC

The time limit for sending a Stamp Duty Land Tax return to HM Revenue and Customs (HMRC), and paying any tax liabilities, is no later than fourteen (14) days of conveyancing (e.g. the completion process).

Most people who buy or sell a home will use the services of a property agent, conveyancer, or a solicitor. They will be able to handle:

  • Claiming any relief (e.g. for first-time buyers).
  • Filing the return and paying the tax to HMRC (by adding the amount to their standard fees).

You can also choose to file a return and pay your SDLT to HM Revenue and Customs (HMRC) yourself. But, reliefs and exemptions apply to certain situations, so you would not need to send a return (see below).

The financial penalties for inaccurate returns can be severe (including making a late payment).

Consideration for Stamp Duty Purposes

The ‘consideration’ refers to the total value for which you will be paying SDLT. As a rule, it will be the actual price paid for the land or property.

But, the chargeable consideration can also include other types of non-monetary payments, such as:

  • Goods
  • Release from a debt
  • Transfer of a debt (e.g. taking on an outstanding mortgage)
  • Works or services

Stamp Duty on Residential Property

When buying residential property (e.g. house, flat), Stamp Duty Land Tax (SDLT) rates apply to portions of the property price as it increases. But, it only applies to properties when the purchase price goes over the threshold (e.g. a set value).

Simply put, the amount of Stamp Duty payable will depend on the (both):

  • Amount paid.
  • Date of purchase.

Important: The SDLT reliefs and exemptions section explains more about the process when the purchase price is over £40,000.

SDLT Rates 8th July 2020 to 30th June 2021

This table shows the property or lease premium or transfer value and how to work out the Stamp Duty Land Tax (SDLT):

  • Zero: Up to £500,000
  • 5%: Next £425,000 (e.g. portion from £500,001 to £925,000)
  • 10%: Next £575,000 (e.g. portion from £925,001 to £1.5 million)
  • 12%: Remaining amount (e.g. portion over £1.5 million)
SDLT Rates 1st July 2021 to 30th September 2021

This table shows the property or lease premium or transfer value and how to work out the Stamp Duty Land Tax (SDLT):

  • Zero: Up to £250,000
  • 5%: Next £675,000 (e.g. portion from £250,001 to £925,000)
  • 10%: Next £575,000 (e.g. portion from £925,001 to £1.5 million)
  • 12%: Remaining amount (e.g. portion over £1.5 million)
SDLT Rates from 1st October 2021 (or before 8 July 2020)

This table shows the property or lease premium or transfer value and how to work out the Stamp Duty Land Tax (SDLT):

  • Zero: Up to £125,000
  • 2%: Next £125,000 (e.g. portion from £125,001 to £250,000)
  • 5%: Next £675,000 (e.g. portion from £125,001 to £925,000)
  • 10%: Next £575,000 (e.g. portion from £925,001 to £1.5 million)
  • 12%: Remaining amount (e.g. portion over £1.5 million)
Buying Your First Home

If you are a first-time buyer (e.g. buying a first home before the 8th of July 2020 or since the 1st of July 2021) you will be able to claim SDLT relief (a discount). As a result, you will be liable for:

  • Zero SDLT: Up to £300,000
  • 5%: On the portion from £300,001 to £500,000 (the normal rules apply for prices over £500,000)

The eligibility criteria relates to you and anyone else that you may be buying a property with if they are first-time buyers as well.

New Leasehold Sales and Transfers

The same SDLT rates also apply to new residential leasehold properties. Hence, you would need to pay Stamp Duty on the purchase price of the ‘lease premium’.

In some cases, total rent paid may be more than the ‘net present value’ (e.g. the life of the lease). If so, when it goes above the current SDLT threshold, you would need to pay 1% Stamp Duty on the portion that is over:

  • £125,000 (purchases after the 1st of October 2021)
  • £250,000 (purchases between the 1st of July 2021 and the 30th of September 2021)
  • £500,000 (purchases between the 8th of July 2020 and the 30th of June 2021)

Note: HM Revenue and Customs (HMRC) produces further guidance about paying Stamp Duty Land Tax (SDLT) on assigned leases in the United Kingdom.

SDLT Rates for Additional Properties

Sometimes, buying a new residential property will result in an ownership of more than one. As a rule, the higher rates due on additional properties will be 3% on top of the standard Stamp Duty Land Tax rates.

Note: Exchanging contracts before the 26th of November 2015 usually means there will be an exemption for the higher rates.

Replacing a Main Residence

The extra 3% SDLT would not apply if the new property is replacing the main residence (providing it has already been sold).

You would own more than one property unless you sold your main residence no later than the day of completion for the new purchase. As a result, you would need to pay the higher rates.

If you sell the previous main home within a period of thirty six (36) months, you can ask HMRC for a repayment of the higher rates of Stamp Duty Land Tax (SDLT) for additional properties.

Note: Special rules of higher rates of Stamp Duty Land Tax apply when owning a property with someone else or in cases where you already own a property outside England, Wales, and Northern Ireland.

What if it takes More than 36 Months?

In situations where it takes longer than three (3) years to sell a previous main home, a refund of the extra 3% SDLT may still apply if you:

  • Bought the new home since the 1st of January 2017.
  • Did not cause the delay (e.g. a public authority blocked the sale, because of the coronavirus pandemic).
  • Have since sold the old home.

You can claim a refund by writing to HM Revenue and Customs (HMRC). This address is for queries only (not for making payments).

BT – Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
United Kingdom

Explain why it took longer than three years to sell the property and include your contact information, as well as details about the:

  • Main buyer (if different to yours).
  • Property subject to higher rate SDLT (including the address, purchase date, and SDLT unique transaction reference number).
  • Previous main residence (including the address, sales date, and SDLT unique transaction reference number).
  • Amount of higher rate SDLT paid.
  • How much tax for which you are seeking a repayment.
  • Bank account and sort code for the person who will receive the refund payment.

SDLT Rates for Non-UK Residents

For SDLT purposes, you will be classed as ‘not a UK resident’ if you are not present in the United Kingdom for at least six months (183 days) during the twelve (12) months before the purchase.

As a rule, a 2% surcharge will be due when buying any residential property in England or Northern Ireland since the 1st of April 2021.

Having to pay the surcharge also means that you may need to pay any other rates of SDLT that apply, such as when you:

  • Are a first-time buyer.
  • Already own a property and the new purchase will be an additional property.

Note: HMRC has further guidance about rates of Stamp Duty Land
Tax for non-UK residents and the surcharge that applies from the 1st of April 2021.

Special SDLT Rules and Rate calculations

SDLT Rates for Non-Residential Property

Stamp Duty Land Tax is due on the ‘chargeable consideration‘
when the purchase price for non-residential or for mixed land or property is more than £150,000. Even so, you would still need to send an SDLT return for most transactions.

As a rule, non-residential properties will include:

  • Agricultural land used as part of a working farm (or for agricultural purposes).
  • Buildings not suitable for living in.
  • Commercial property (e.g. offices, shops).
  • Forests.
  • Land or property not classed as part of garden or grounds for a dwelling.
  • Six (or more) residential properties purchased in a single transaction.

Simply put, a building containing residential and non-residential elements is a ‘mixed property’ (e.g. a ground floor flat connected to a doctor’s surgery).

Note: Residential SDLT rates apply to agricultural land when sold as part of a dwelling’s garden or grounds (e.g. a cottage with open fields). You can check which property transactions are exempt from Stamp Duty Land Tax (SDLT) on the GOV.UK website.

Sales and Transfers of New Leasehold Properties

SDLT is due on a new non-residential or a mixed leasehold property in two parts (e.g. separate calculations then added together), being the:

  • Lease premium (e.g. the purchase price of the lease).
  • Net present value (e.g. the amount paid as annual rent). SDLT does not apply to the rental part if the NPV is less than £150,000.

SDLT is only due on the lease price (chargeable consideration) if the purchase is for an assigned lease (e.g. one that is already existing).

Previous Stamp Duty Land Tax Rates

Contracts exchanged before the 17th of March 2016 may qualify for using previous SDLT rates. Even so, you can usually choose to use either the previous or the current SDLT rates.

Note: The HMRC SDLT calculator allows you to work out whether you qualify for both rates so you can calculate which is cheaper to pay.

Receiving Land and Property Transfers

Stamp Duty Land Tax may be due if someone transfers the ownership of land or property to you in exchange for either a ‘chargeable consideration’ or a payment.

You can read more about how the type of transfer, marital status, as well as other factors determine whether you would need to pay SDLT when transferring ownership of land or property.

Shared Ownership Properties

Stamp Duty Land Tax (SDLT) may be due when buying a property through one of the shared ownership schemes run by one of the approved public bodies. Typical examples include:

  • Development corporations
  • Housing associations
  • Housing action trusts
  • Local housing authorities
  • The Commission for the New Towns
  • The Northern Ireland Housing Executive

If so, you can usually choose between:

  • Paying the Stamp Duty Land Tax in stages.
  • Making a one-off payment based on ‘market value election’ (e.g. the current market value of the property).
Making a Market Value Election

You would need to submit a return and pay SDLT based on the appropriate residential rate. The calculation uses the property’s total market value even in circumstances where the purchase is only for a share.

Following that, there would be no need to pay any extra SDLT. This applies even in cases where you buy a bigger share in the property at some time in the future.

Note: HM Revenue and Customs (HMRC) produces further guidance about market value election (e.g. for cases where the lease does not give you the right to have the freehold).

Paying SDLT in Stages

The first SDLT payment is based on the actual ‘lease premium’ (e.g. price paid for the lease) if it is more than the current Stamp Duty threshold.

You would not pay SDLT if the lease premium is less than the SDLT threshold. But, it would still be necessary to submit a return.

If the ‘net present value’ (e.g. total rent over the life of the lease) is above the SDLT threshold, you may need to make an additional payment.

How Buying more Shares affects SDLT

What happens if you decide to buy more shares in the property? If so, there is no need to send a return to HMRC or pay any extra SDLT – until or unless you own more than 80% share.

Once the share that you own goes over 80% you would need to send a return and pay any relevant SDLT on:

  • The actual transaction that sent you over 80%.
  • Any transactions made after that takes place.

Note: You can read more about paying SDLT in stages and buying further shares on the GOV.UK website.

SDLT Relief and Exemptions

Buying a first home, as well as certain other situations, could mean you qualify for Stamp Duty Land Tax reliefs to reduce the amount of tax you need to pay (providing you completed an SDLT return).

Note: Further guidance from HM Revenue and Customs (HMRC) clarifies what the main Stamp Duty Land Tax reliefs are for land or property transactions.

Stamp Duty Exemptions UK

Not all property transactions are subject to Stamp Duty Land Tax. Thus, you would not need to pay SDLT (or file a return) in cases where you:

  • Are using alternative property financial arrangements (e.g. to comply with Sharia law).
  • Buy a freehold property for less than £40,000.
  • Buy a new or assigned lease of at least seven (7) years (providing the premium is less than £40,000 and the annual rent is under £1,000).
  • Buy a new or assigned lease of less than seven (7) years providing the amount you pay is less than the residential or non-residential SDLT threshold.
  • Do not receive money (or any other payment) during the land or property transfer.
  • Have a property transferred to you due to a divorce or dissolution of a civil partnership.
  • Receive the property as part of someone’s Last Will and Testament.

Note: HMRC has extra guidance about property transactions that do not need a return (e.g. exempt from Stamp Duty Land Tax) in the United Kingdom.

Related Help Guides

UK Rules for Stamp Duty Land Tax (SDLT)