When must you pay Stamp Duty Land Tax?

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By Heather Scobie

Licensed Conveyancer & Associate

You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.  At Chubb Bulleid we recently had an in house talk from one of the UK’s leading experts on SDLT.  He told us that SDLT is considered by some the most complicated tax in the world.

The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties. There are also different rates payable if you’re buying your first home which means that you may get a relief from stamp duty land tax if the purchase price is £500,000 or less and all buyers are first time buyers and intend to occupy the property as their main home.

The amount you will have to pay will depend on whether the land or property is residential and whether you’re a first time buyer or whether it is non-residential or a mixed use – residential and commercial.

There are some circumstances where the SDLT is surcharged, for instance if you purchase a second property before selling your existing main residence.  However, if you then go onto sell your existing main residence within three years of completion of the purchase of the new property, it may be possible to reclaim the difference between the standard rate and the surcharged rate.

The HMRC have provided a stamp duty calculator on their website, which is helpful but it does not replace expert advice.  So please do talk to us.  You may be able to reduce the amount of tax you pay by claiming relief, such as if you’re a first-time buyer or purchasing more than one dwelling but there are other circumstances where you may  unwittingly become surcharged and face a huge stamp duty land tax bill.

Because SDLT has become so complex and such large sums may be involved, we will discuss it with you at the outset to avoid any nasty surprises along the way.  This will involve asking you about the facts of the transaction, other properties you own and facts about the property itself.    It is not an exciting subject but we need to be completely aware of your liability for SDLT from the outset particularly when setting a budget in negotiations around a property purchase.