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Stamp Duty Rates – The FAQs

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Stamp Duty Rates 2020/21

Residential Property Stamp Duty

General

The freehold residential stamp duty rates in England and Northern Ireland are shown in the table below:

ConsiderationNormal Rate Additional Property
0 – £40k0%0%
£40k –  £125k0%3%*
£125k – £250k2%5%
£250k – £925k5%8%
£925k – £1.5m10%13%
£1.5m +12%15%
* In respect of an additional property purchased £40k – £125k, the rate of SDLT rate is 3% on total purchase price.

Additional Properties – 3% Surcharge

There are increased rates of stamp duty where one purchases a so-called additional property.

An additional property will include buy to let properties and second homes.

With effect from April 2016, such a person has attracted a 3% surcharge. This is added to the rate which would otherwise be applicable.

The surcharge only applies to residential properties which are acquired as additional properties…

Replacing a Main Residence & SDLT

The 3% surcharge will generally not apply if one is changing their main residence.

If a previous home is not sold immediately, stamp duty will be calculated at the higher rate and a refund may be claimed later.

Stamp duty refunds can be claimed up to 12 months after selling a previous home as long as the old home is sold within 3 years of purchasing the new one.

For further information see our [dedicated article] on this topic.

First Time Buyers & SDLT

See our [dedicated note] on this topic.

Corporate Purchases & SDLT

See our [dedicated note] on this topic.

Commercial Property & SDLT

General

A different set of rates and thresholds apply to acquisitions of non-residential property / commercial property.

Non-residential / commercial property includes

  • Retail units
  • Offices
  • Farm land
  • Woodland
  • Other land & property not used as a dwelling
  • Transactions involving 6 or more residential properties
  • Mixed use property

The stamp duty rates that apply to non-residential property acquisitions are as follows:

ConsiderationNon-residential
£0 – £150k0%
£150k – £250k2%
£250k +5%

 

Multiple Dwellings Relief & SDLT

See our [dedicated note] on this topic.

Conclusion

The primary factor regarding the stamp duty rate that will be payable on a property acquisition will be whether the property is residential or non-residential. Each category has its own thresholds and rates.

Generally speaking, non-residential property will, pound for pound, pay a lower rate of stamp duty than will be payable on a residential property purchase.

Further, one then needs to take care to ensure that any applicable reliefs are secured and claimed.

If you have any queries about stamp duty rates or any other aspects of property tax then please get in touch.

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