Stamp Duty Land Tax (“SDLT”) is a duty payable to HMRC upon the purchase of property in England (this article does not cover tax payable on the purchase of Scottish property, which is subject to a different regime under the Land and Buildings Transaction Tax (LBTT), or on the purchase of Welsh property, which now falls under Land Transaction Tax (LTT)).
SDLT is payable on any acquisition of a chargeable interest in property, including transfers, the creation of interests such as grant of lease, and variations to existing interests. The amount of SDLT payable is calculated based upon the consideration.
Additional Homebuyers Rate
If a purchaser already owns a property they will be liable to pay the Additional Homebuyers Rate of 3% on top of the usual SDLT residential rate from £0. The test for owning another property includes owning a substantial beneficial interest over 25% in another property or your spouse owning another property.
The amount of SDLT payable is based on the consideration as follows (based on rates as at 20.11.18):
|Purchase price of property
||Rate of Stamp Duty
||Additional Home Rate*
|£125,001 – £250,000
|£250,001 – £925,000
|£925,001 – £1,500,000
|Over £1.5 million
Additional Homebuyers Rate Refund
If your purchase is to replace your main residence but you have not yet sold your current property at the time SDLT is due, you will be able to claim a refund on the Additional Homebuyers Rate paid on your new property if you sell your current property within 36 months of your purchase.
Where there is more than one purchase and those purchases are between the same buyer and seller and form part of the same scheme or a series of transactions, they will be taken as linked transactions and SDLT will be payable on the aggregate price of all of those properties that are linked.
Linked Transactions include people connected to the buyer or seller of a linked transaction. A connected person is defined under s1122 of the Corporation Tax Act 2010 and includes a person’s spouse and relatives. This means where two relatives both purchase properties under the same scheme or development, it will be taken as a linked transaction. A Multiple Dwelling Relief may be available for those purchasing more than one property.