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Stamp Duty Land Tax Rates
& Thresholds
Stamp Duty
Land Tax (SDLT) is charged on land and
property transactions in the UK. The tax is
charged at different rates and has different
thresholds for different types of property
and different values of transaction.
The tax rate and payment threshold can vary
according to whether the property is in
residential or non-residential use, and
whether it is a freehold or leasehold. SDLT
relief is available for certain kinds of
property or transaction.
This guide
provides an overview of the SDLT rates and
provides links to related guidance where
necessary.
SDLT rates for residential
property
The table below applies for
all freehold residential
purchases and transfers and
the premium paid for a new
lease or the assignment of
an existing lease. (If the
property will be used for
both residential and
non-residential purposes the
rates differ - please see
the section ‘SDLT for
non-residential or mixed use
property’.)
New thresholds from
September 2008
The £175,000 threshold shown
in the table applies from 3
September 2008 until 2
September 2009 inclusive
(unless the lease is for
less than 21 years - see the
later section on this). The
new threshold means that
Disadvantaged Areas Relief,
previously available for
properties in areas
designated as
‘disadvantaged’, doesn’t
apply during this period.
Read more about this relief
in section 'Properties
bought in a disadvantaged
area'.
New leases
If the transaction involves
the purchase of a new lease
with a substantial rent
there may be an additional
SDLT charge to that shown
below, based on the rent.
See the next section and
further table 'SDLT on rent
for new leasehold properties
(residential)' for more
detail.
Residential land or property
SDLT rates and thresholds
|
Purchase price/lease premium or transfer
value |
SDLT rate |
|
Up to £175,000
(until 2 Sept 2009 - see note above)
|
Zero |
|
Over £175,000
to £250,000 |
1% |
|
Over £250,000
to £500,000 |
3% |
|
Over £500,000
|
4% |
If the value is above the
payment threshold, SDLT is
charged at the appropriate
rate on the whole of the
amount paid. For example, a
house bought for £180,000 is
charged at 1 per cent, so
£1,800 must be paid in SDLT.
A house bought for £350,000
is charged at 3 per cent, so
SDLT of £10,500 is payable.
Special rules for
residential leases of less
than 21 years
Note that the temporary SDLT
threshold of £175,000 for
residential property
transactions does not apply
to:
• the assignment of an
existing lease which has
less than 21 years to run
• the grant of a lease for a
term of less than 21 years
In these cases the normal
thresholds of £125,000
(£150,000 if the property is
situated in a disadvantaged
area) apply.
Properties bought in a
disadvantaged area
Disadvantaged Areas Relief
(whereby residential
properties bought in areas
designated by the government
as ‘disadvantaged’ had a
higher SDLT threshold of
£150,000) will not apply for
residential only property
purchases between 3
September 2008 and 2
September 2009 inclusive.
Instead the SDLT threshold
will be the same as for all
other residential property
as shown above. The only
exception is where the lease
is for less than 21 years -
as described earlier.
Some property transactions
in a disadvantaged area may
have both residential and
non- residential parts - eg
a shop with a flat above. In
this case the temporary
£175,000 threshold between 3
September 2008 and 2
September 2009 inclusive
does not apply. For SDLT
purposes, the property value
is apportioned on a fair and
reasonable basis between the
two uses. If the amount
attributed to the
residential element does not
exceed £150,000 then
Disadvantaged Areas Relief
will apply to that element
and a separate £150,000
threshold applies to the
non-residential element.
Read more about Disadvantaged Area
Relief on the HMRC website
SDLT
on rent - new residential leasehold
purchase
When a
new residential lease has a
substantial annual rent, SDLT is
payable on both of the following,
which are calculated separately and
then added together:
• the lease premium (purchase
price) - see the table above
• the ‘net present value’ (NPV)
of the rent payable
The
NPV is based on the value of the
total rent over the life of the
lease and can be worked out using
HMRC’s online calculator (link
below).
In
practice SDLT only becomes payable
on a fairly high rent - starting at
around £4,500 a year for a 99-year
lease, for example, however the
exact threshold depends on the
length of the lease.
SDLT
on rent for new leasehold properties
(residential)
|
Net present value of rent -
residential |
SDLT Rate |
|
£0 - £175,000 |
Zero |
|
Over £175,000
|
1% of the value that exceeds
£125,000 |
|
If the NPV
exceeds £175,000 tax is due at 1% on the
excess over the normal £125,000 threshold
not the new temporary level of £175,000
For example,
if the NPV of the rent on a new residential
lease totals £200,000, then the SDLT on this
rent is 1% of £75,000, or £750. This charge
is then added to the SDLT charged on the
premium paid for the new lease, shown in the
previous table.
Different
rates apply for mixed use purchases - see
the later section on this.
Read more on the HMRC website about
calculating SDLT for leashold purchases
Go to the SDLT Calculator on the HMRC website
If six or more residential properties form
part of a single transaction
If six or more properties form part of a
single transaction the rules, rates and
thresholds for non-residential properties
apply. The amounts paid for all the
properties in the transaction must be added
together in order to establish the rate of
tax payable.
SDLT rates for
non-residential or mixed use
properties
Non-residential property
includes:
•
commercial property such as
shops or offices
•
agricultural land
•
forests
•
any other land or property
which is not used as a
dwelling
•
six or more residential
properties bought in a
single transaction
A mixed use property is one
that incorporates both
residential and
non-residential elements.
The table below applies for
freehold and leasehold
non-residential and mixed
use purchases and transfers
If the transaction involves
the purchase of a new lease
with a substantial annual
rent, there may be
additional SDLT charge to
that shown below, based on
the rent. See the later
section and table for more
detail.
Non-residential land or
property rates and
thresholds
|
Purchase price/lease premium or transfer value
(non-residential or mixed use) |
SDLT
rate |
|
Up to £150,000 -
annual rent is under £1,000 |
Zero |
|
Up to £150,000 -
annual rent is £1,000 or more |
1% |
|
Over £150,000 to
£250,000 |
1% |
|
Over £250,000 to
£500,000 |
3% |
|
Over £500,000
|
4% |
Note that for
the above purpose the annual rent is the
highest annual rent known to be payable in
any year of the lease, not the net present
value used to determine any tax payable on
the rent as described below.
SDLT on rent -
new non-residential or mixed use leasehold
purchase
When a new
non-residential or mixed use lease has a
substantial annual rent, SDLT is payable on
both of the following which are calculated
separately and then added together:
• the lease premium or
purchase price - see the table above
• the net present value of the
rent payable (this is based on the value of
the total rent over the life of the lease
and can be worked out using HMRC’s online
calculators)
SDLT on rent
for new leasehold properties
(non-residential or mixed use)
|
Net present value of rent -
non-residential |
SDLT rate |
|
£0 - £150,000 |
Zero |
|
Over £150,000 |
1% of the value that exceeds
£150,000 |
SDLT and Stamp Duty rates up to September
2008
Follow the links below to check SDLT and
Stamp Duty rates in earlier tax years.
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