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The Essentials On Stamp Duty Across The UK

Posted 3 October 2022 by Keith Osborne

A buyer's guide to Stamp Duty, Land Transaction Tax and Land & Buildings Transaction Tax...

Stamp Duty Land Tax, known by many simply as Stamp Duty or SDLT, is a tax that applies to the purchase of residential property in England and Northern Ireland. The equivalent in Wales is called Land Transaction Tax (LTT) and in Scotland it’s Land and Buildings Transaction Tax (LBTT). The principle is the same for all of them and we take you through the similarities and differences between them here.

The amount of tax you pay is dependent on your status as the purchaser and the price and use of the property you are buying.

How is Stamp Duty calculated?

In general, these taxes are calculated in bands of prices, so the more expensive the property, the more tax you will have to pay. There can be variations depending on whether you are:

  • a first-time buyer
  • a buy-to-let investor or someone buying a second home
  • an overseas buyer/non-UK resident

As of September 2022, following the government’s ‘mini-budget’, these are the current rates of SDLT, LTT and LBTT across the UK.

 

England and Northern Ireland

From 23 September 2022 the following rates apply:

Stamp Duty Land Tax (SDLT) for owner-occupier

Property or lease premium or transfer value SDLT rate
Up to £250,000 Zero
next £675,000 (the portion from £250,001 to £925,000) 5%
next £575,000 (the portion from £925,001 to £1.5million) 10%
remaining amount (the portion above £1.5million) 12%

 

Stamp Duty Land Tax (SDLT) for first-time buyer

Property or lease premium or transfer value SDLT rate
Up to £425,000 Zero
next £500,000 (the portion from £425,001 to £925,000) 5%
next £575,000 (the portion from £925,001 to £1.5million) 10%
remaining amount (the portion above £1.5million) 12%

 

Stamp Duty Land Tax (SDLT) for buy-to-let/second home buyer

Property or lease premium or transfer value SDLT rate
Up to £250,000 3%
next £675,000 (the portion from £250,001 to £925,000) 8%
next £575,000 (the portion from £925,001 to £1.5million) 13%
remaining amount (the portion above £1.5million) 15%

 

Stamp Duty Land Tax (SDLT)  for overseas/non-UK resident buy

Property or lease premium or transfer value SDLT rate
Up to £250,000 5%
next £675,000 (the portion from £250,001 to £925,000) 10%
next £575,000 (the portion from £925,001 to £1.5million) 15%
remaining amount (the portion above £1.5million) 17%

 

Wales

From 1 July 2021 to 9 October 2022 the following rates apply:

Land Transaction Tax (LTT)

Property or lease premium or transfer value LTT rate
Up to £180,000 Zero
next £70,000 (the portion from £180,001 to £250,000) 3.5%
next £150,000 (the portion from £250,001 to £400,000) 5%
next £350,000 (the portion from £400,001 to £750,000) 7.5%
next £750,000 (the portion from £925,001 to £1.5million) 10%
remaining amount (the portion above £1.5million) 12%

 

From 10 October 2022 the following rates apply:

Land Transaction Tax (LTT)

Property or lease premium or transfer value LTT rate
Up to £225,000 Zero
next £175,000 (the portion from £225,001 to £400,000) 6%
next £350,000 (the portion from £400,001 to £750,000) 7.5%
next £750,000 (the portion from £925,001 to £1.5million) 10%
remaining amount (the portion above £1.5million) 12%

 

Scotland

From 23 September 2022 the following rates apply:

Land and Buildings Transaction Tax (LBTT)

Property or lease premium or transfer value LBTT rate
Up to £145,000 Zero
next £105,000 (the portion from £145,001 to £250,000) 2%
next £75,000 (the portion from £250,001 to £325,000) 5%
next £425,000 (the portion from £325,001 to £750,000) 10%
remaining amount (the portion above £750,000) 12%

 

If you are a first-time buyer, there is a different price band of 0% LBTT:

Land and Buildings Transaction Tax (LBTT)

Property or lease premium or transfer value LBTT rate
Up to £175,000 Zero
next £175,000 (the portion from £145,001 to £250,000) 2%
next £75,000 (the portion from £250,001 to £325,000) 5%
next £425,000 (the portion from £325,001 to £750,000) 10%
remaining amount (the portion above £750,000) 12%

 

When do you pay your property tax?

Once you complete your purchase on your home, you have 14 days from the “effective transaction date” to complete a Stamp Duty Land Tax return and pay what you owe. The deadline is 30 days for Land Transaction Tax in Wales, and Land and Buildings Transaction Tax in Scotland.

If you do not pay it within the deadline, you may be face a penalty and have to pay interest.

Are any properties exempt from SDLT?

There are a few situations where you are exempt from paying SDLT (detailed government guide here) but among them are

  • zero-carbon homes under £500,000 are exempt from SDLT, and zero-carbon homes over £500,000 will have their SDLT reduced by £15,000
  • if a property has been left to you in a will, or no money or payment in received in a property transfer,
  • property is transferred because of divorce or dissolution of a civil partnership
  • the property is bought for less than £40,000

 

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