Stamp Duty Land Tax

Stamp Duty Changes

It is compulsory for you to pay Stamp Duty Land Tax if you buy a property or land which is priced over a certain amount.

You must pay this tax if you:

  • Buy a freehold property
  • Buy a new or existing leasehold
  • Buy a property through a shared ownership scheme
  • Are transferring land or property in exchange for payment, e.g. you take on a mortgage or buy a share in a house.

The Stamp Duty tax changed on the 16th March and the decision was made by George Osborne as he delivered his 8th budget as Chancellor. The Stamp Duty reforms on non-residential property work just like income tax. Rather than paying the same rate on the whole value of the property depending on which price bracket it falls into, the rates will now only apply to the portion of the price which it falls into. Previously, if you paid just £1 more on a property you could end up with a stamp duty bill which was thousands of pounds higher because it fell into a higher bracket.

The new rates will be 0% on the price between £0 and £150,000; 2% between £150,001 and £250,000; and 5% above £250,000. Osborne stated that the new system would raise an extra £500m a year and only 9% of transactions would end up paying more stamp duty than previously.

George put it like this: “So, if you buy a pub in the Midlands worth, say, £270,000, you would today pay over £8,000 in stamp duty. From tomorrow you will pay just £3,000,” Osborne told the House of Commons. “It’s a big tax cut for small firms.”

The value you pay SDLT on is the price you pay for the property or land. It can also include other types of payment, e.g., for:

  • Goods
  • Works or services
  • Release from a debt
  • Transfer of a debt, including the value of any outstanding mortgage

How and when can you pay this?

HMRC must receive payment of the tax within 30 days of completion of the process. If you are seeking help from an agent, conveyancer or solicitor, they will usually file your return and pay the tax on your behalf, this will be on the day of completion.

If they don’t do this for you, you can file a return with HMRC here and pay the tax yourself.
You can use the Stamp Duty calculator to work out the SDLT.