Stamp Duty on UK Property
Here we explain what Stamp Duty Land tax is, and how it affects investors with an interest in UK buy to let property.
(First published in 2021 but updated in 2023.)
What is Stamp Duty Land Tax?
Purchasers must pay Stamp Duty Land Tax (SDLT) when buying a property or land over a certain price in England and Northern Ireland. (Different taxes apply in Scotland and Wales.)
Stamp Duty is applied to residential and commercial property at varying rates. The obligation also varies based on an individual’s circumstances.
How do I pay Stamp Duty?
Buyers must appoint a solicitor to purchase their property. The solicitor usually calculates the amount of Stamp Duty owed and outlines what needs to be paid.
The amount is paid on your behalf on the day of completion and add the amount to their fees.
When do I pay Stamp Duty?
Purchasers must pay the tax within 14 days of completion.
UK Stamp Duty Rates
Stamp Duty Land Tax (SDLT) is payable in different amounts above certain thresholds. The UK Government notes that if you buy a property for less than the threshold, there’s no SDLT to pay. The current SDLT thresholds, introduced in September 2022, 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
However, landlords must pay a +3% surcharge on any property worth more than £40,000. Consequently, the effective rates for investors are as follows:
- Up to £250,000: 3%
- £250,001-£925,000: 8%
- £925,001-£1.5m: 13%
- Over £1.5m: 15%