Stamp and property taxes

Stamp duty land tax

Stamp duty land tax (SDLT) on residential property is charged at different rates depending on the portion of the purchase price that falls within a certain rate band.

Rates are applied only to the portion of the property's value that exceeds the relevant band threshold. This replaces the previous 'slab rate' system under which SDLT was charged against the total property value.

Stamp duty land tax on residential properties 

Cost Residential Cost Non-residential
Up to £125,000 0% Up to £150,000 0%
£125,001 to £250,000 2% £150,001 to £250,000 1%
£250,001 to £925,000 5% £250,001 to £500,000 3%
£925,001 to £1,500,000 10% Over £500,000 4%
Over £1,500,000 12%    
Over £500,000 15%*    

* The 15% rate applies to certain acquisitions of residential property by 'non-natural' persons. That is a company, a partnership including a company or a collective investment scheme.

The land and buildings transaction tax replaces stamp duty in Scotland. 

Land and buildings transaction tax

This applies to land transactions in Scotland.

Cost Residential Cost Non-residential or mixed use
Up to £145,000 0% Up to £150,000 0%
£145,001 to £250,000 2% £150,001 to £350,000 3%
£250,001 to £325,000 5% Over £350,000 4.5%
£325,001 to £750,000 10%    
Over £750,000 12%    

Non residential and mixed use properties

SDLT is charged on non residential and mixed use properties at the following rates.

Cost SDLT rate
Up to £150,000 0%
£150,001 to £250,000 1%
£250,001 to £500,000 3%
Over £500,000 4%

Partnerships

Stamp duty applies to transfers of partnership interests, but the amount payable will not exceed the amount that would have been payable on the value of any shares or securities included in the transfer.

SDLT applies to the transfer of an interest in land into or out of a partnership or the transfer of an interest in a partnership (where the partnership property includes an interest in land). The charge is based on the reported value of the land and the proportionate interest transferred and it applies only to partnerships whose sole or main activity is investing in or dealing in land. There is no longer an SDLT charge on transfers of partnership interests in other partnerships such as professional partnerships, farming partnerships or partnerships carrying on a trade which is not land-related.

New leases

Duty is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV's over £125,000 and on non-residential NPV's over £150,000.

VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease premiums

Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £600 annually is also payable).

Transfers that attract stamp duty not exceeding £5 (fixed or ad valorem) will be exempt and not have to be presented for stamping. The principal reason for this is to reduce administration for smaller transactions.

Did you know?

The Treasury is expecting to receive £11.5 billion (2014/15 - £10.9 billion) in SDLT.