If you are buying a property, the chances are that you’ve heard the term ‘Stamp Duty Land Tax’ being used.
But, we know that buying a house can be confusing, and hearing all of these different terminologies can be overwhelming. In this article we look at what Stamp Duty Land Tax is, and when you will need to pay it.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax is a tax imposed by the government on the purchase of land or properties over a certain value in the UK.
The amount you are charged depends on your personal circumstances, such as whether you are a first-time buyer, already own a property or whether the property will be used as a residence or mixed-use property.
The tax is paid to His Majesty’s Revenue and Customs (HMRC).
Who has to pay Stamp Duty Tax?
There are different thresholds for who and when you will need to pay Stamp Duty Tax.
At present, the thresholds are the following. If you buy a property for less than the threshold, there’s no SDLT to pay.
The current SDLT thresholds are:
- £250,000 for residential properties
- £425,000 for first-time buyers buying a residential property worth £625,000 or less
- £150,000 for non-residential land and properties
How much is Stamp Duty?
How much you pay depends on:
- Whether the land or property will be used as a residential property or as a non-residential or mixed-use property
- Whether you are eligible for relief or an exemption
For example, if you’re buying a residential property there are different rates of SDLT if:
- You’re a first-time buyer
- You already own a property and you’re buying an additional property
- You’re not a UK resident
How to calculate Stamp Duty
The simplest way to work out how much Stamp Duty Land Tax you will pay is by using the HM Revenue and Customs (HMRC) Stamp Duty Land Tax calculator. Rates depend on the type of property you are buying, whether you already own a property and your circumstances.
When do you pay Stamp Duty?
Stamp Duty Land Tax will usually need to be paid within 14 days of completion.
You may be charged penalties and interest if you do not file your return and make your payment within 14 days of completion.
How do you pay Stamp Duty Tax?
If you have a solicitor or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees.
Further reading
Purchases – Oakwood Property Solicitors
WHAT TO DO NEXT
To make a start on the next step in your property journey, get in touch today to book a consultation with a member of our team. Call us on 0113 218 5727 to find out how we can help you.
