WHAT IS STAMP DUTY LAND TAX?

Stamp Duty Land Tax (SDLT) is a progressive tax paid when purchasing leasehold, freehold, or shared ownership real estate over £250,000 in England, Northern Ireland, and Wales. In Scotland it is called Land and Buildings Transaction Tax (LBTT).

WHO PAYS STAMP DUTY?

Everyone who purchases a property in the UK whether residential or non-residential, pays stamp duty land tax. This includes corporate bodies, overseas citizens, and non-natural persons.

WHY WAS A STAMP DUTY HOLIDAY ANNOUNCED?

The UK government has not announced any plans for another stamp duty holiday in 2023. The current stamp duty holiday, which was announced in February 2023, is due to expire on 31 March 2025.

It is possible that the government could extend the stamp duty holiday beyond March 2025, but this would depend on a number of factors, such as the state of the economy and the property market.

In the meantime, buyers can still benefit from the current stamp duty relief measures, which include an increase to the nil-rate threshold and the first-time buyer's relief threshold.

WHEN IS STAMP DUTY PAID?

Stamp duty is payable to HM Revenue & Customs (HMRC) 14 days from the date of completion or late penalties apply. At IP Global, your solicitor will take care of this and make sure the deadline isn’t missed.

HOW DO I REDUCE STAMP DUTY TAX?

Stamp duty tax is only payable on your property’s permanent building fixtures. This means that removable fixtures and fittings such as fridges, sofas, freestanding wardrobes, curtains, and carpets are not subject to the SDLT tax. You can therefore subtract these items from the total property price.

What is the stamp duty on a second home in the UK?

The stamp duty on a second home in the UK is higher than the stamp duty on a first home. This is because the government wants to discourage people from buying multiple homes, which can drive up the price of housing and make it more difficult for first-time buyers to get onto the property ladder.

The stamp duty rates for second homes are as follows:

Purchase price               Stamp duty rate
£0-£40,000                   No stamp duty
£40,001-£250,000         3%
£250,001-£925,000       8%
£925,001-£1.5 million     13%
Over £1.5 million            15%

How do you calculate the amount of stamp duty to pay for a second home?

To calculate the amount of stamp duty you owe on a second home, simply multiply the stamp duty rate for the relevant price band by the purchase price of the property. For example, if you are buying a second home for £300,000, you will pay 3% stamp duty on the first £250,000 of the purchase price (£7,500) and 8% stamp duty on the remaining £50,000 (£4,000), for a total stamp duty bill of £11,500.

Are there any exceptions to higher stamp duty rates for second homes?

There are a few exceptions to the higher stamp duty rates for second homes. For example, if you are buying a second home to live in while you renovate your main home, you may be eligible for a reduced rate of stamp duty. You may also be eligible for a reduced rate of stamp duty if you are buying a second home for your disabled child or dependent relative.

What is LBTT in Scotland?

LBTT stands for Land and Buildings Transaction Tax. It is a tax that is payable on the purchase of residential and non-residential property in Scotland. LBTT was introduced on 1 April 2015, replacing Stamp Duty Land Tax (SDLT).

The rates of LBTT vary depending on the type of property being purchased and the purchase price. For example, first-time buyers are eligible for a relief on LBTT on the first £425,000 of the purchase price of their first home.

The following table shows the LBTT rates for residential property in Scotland:

| Purchase price | LBTT rate |
| £0-£40,000 | No LBTT |
| £40,001-£250,000 | 2% |
| £250,001-£325,000 | 5% |
| £325,001-£750,000 | 10% |
| Over £750,000 | 12% |

How do you calculate the amount of LBTT to pay?

To calculate the amount of LBTT you owe on a residential property in Scotland, simply multiply the LBTT rate for the relevant price band by the purchase price of the property. For example, if you are buying a residential property for £300,000, you will pay 2% LBTT on the first £250,000 of the purchase price (£5,000) and 5% LBTT on the remaining £50,000 (£2,500), for a total LBTT bill of £7,500.

Are there exceptions to paying LBTT?

There are a few exceptions to the LBTT rates for residential property. For example, if you are buying a residential property to live in while you renovate your main home, you may be eligible for a reduced rate of LBTT. You may also be eligible for a reduced rate of LBTT if you are buying a residential property for your disabled child or dependent relative.

Do first-time buyers have to pay stamp duty in the UK?

First-time buyers in the UK do not have to pay stamp duty on the first £425,000 of the purchase price of their first home. This is a relief that was introduced in July 2020 to help first-time buyers get onto the property ladder.

Can you get a stamp duty rebate in the UK?

Yes, you can get a stamp duty rebate in the UK if you meet certain criteria. Here are some examples:

First-time buyer relief: First-time buyers are eligible for a stamp duty rebate on the first £425,000 of the purchase price of their first home.
Multiple dwellings relief: If you are buying a property to live in while you renovate your main home, you may be eligible for a stamp duty rebate on the second property.
Disabled relative relief: If you are buying a property for your disabled child or dependent relative, you may be eligible for a stamp duty rebate.
Overpaid stamp duty: If you have overpaid stamp duty, you may be able to claim a rebate.
To claim a stamp duty rebate, you will need to fill out a form and submit it to the HM Revenue and Customs (HMRC). You can find the form on the HMRC website.

Disclaimer: This information is for reference only. Our stamp duty calculator has been designed to give a useful general indication of costs. Calculation results are approximations and for information purposes only and rates quoted are not considered as rate guarantees.