SDLT - Have you paid the right amount?

Stamp Duty Land Tax or “SDLT” is due when someone buys a property, or land, over a certain price in England and Northern Ireland. 

Currently, the SDLT threshold is £125,000 for residential properties, and £150,000 for non-residential properties and land. 

Table of rates
Property or lease premium or transfer value (residential) SDLT rate Additional rate
Up to £125,000 0% 3%
The next £125,000 (the portion from £125,0001 - £250,000) 2% 5%
The next £675,000 (the portion from £250,001 - £925,000)  5% 8%
The next £575,000 (the portion from £925,001 - £1.5m) 10% 13%
The remaining amount (the portion above £1.5m) 12% 15%
 
Property or lease premium or transfer value (commercial)  SDLT rate
Up to £150,000 0%
The next £100,000 (the portion from £150,0001 - £250,000)  2%
The remaining amount (the portion above £250,000) 5%

Over the past few years, SDLT has become more complicated to understand and calculate due to additional bands and rates set by the government. 

First-time buyers
If you are a first-time buyer, you are eligible to claim a relief on SDLT so you will not pay any tax up to the value of £300,000 and only 5% on the portion from £300,001 to £500,000. 
  • You are only eligible if you and anyone else you are buying with are first-time buyers. 
  • Your purchase is completed on or after 22 November 2017. 

If the value of the property or land is more than £500,000, the standard rates of SDLT apply.

Additional 3% rate
If you or a joint purchaser already own a property and are acquiring an additional property (or properties), there may be a surcharge rate of 3% applied to the standard rate of SDLT.

Properties which you own and are outside of the UK are considered, and if you are married, or in a civil partnership, your spouse’s properties will also be considered. 

Residential vs non-residential
In the event where a residential property is purchased, and it comes with a large area of land, or another type of property on site; for the purposes of calculating SDLT, it may be considered non-residential. This is extremely beneficial if you are subject to the higher 3% rates on initial review. 

Planning opportunities
There are plenty of planning opportunities when it comes to SDLT, and planning is an essential step to take to ensure the right amount of SDLT is paid. 
  • If you purchase a new property, and sell your previous residence within 3 years of the new purchase, you could potentially reclaim the additional 3% SLDT you would have incurred. 
  • As previously mentioned, if the residential property you have purchased includes a large plot of land, or a non-residential/commercial property is attached, it may be possible to claim lower rates of SDLT. 
  • If you purchase land with multiples dwellings in situ, your SDLT liabilities may be reduced through the reliefs for annexes or Multiples Dwellings Relief. 
  • If you have previously sold your home but have taken some time to find a new then the lower rates of residential SDLT could be payable, even if you own a buy to let property.

There is a 12-month window for taxpayers to amend their SDLT return from the day it is submitted. Therefore, it is important for any amendments to be made during this time otherwise any SDLT overpaid may become unrecoverable. 

Beware: In most scenarios, the deadline for filing your SDLT return is only 14 days from the date of completion of the property purchase, so it is advisable to spend time reviewing your SDLT liabilities before completion, to ensure your return is correct and can be submitted on time. 

Moore & SDLT
Our specialist SDLT service provides you with expert advice tailored to your specific needs. We advise:
  • Solicitors
  • Private individuals
  • Property developers
  • Accountants
  • Other professionals

Our service is provided directly on an ad-hoc basis, with a no-obligation fee quote provided upon the submission of a query. For moreinformation, contact your local office today.
 

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