Stamp Duty / SDLT
| STAMP DUTY LAND TAX : rates as from 1st January 2010 Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK : the tax is charged at different rates and has different thresholds for different types of property and different values of transaction. The tax rate and payment threshold can vary according to whether the property is in residential or non-residential use, and whether it is a freehold or leasehold : SDLT relief is available for certain kinds of property or transaction. SDLT rates for residential property. the table below applies for all freehold residential purchases and transfers and the premium paid for a new lease or the assignment of an existing lease. New Leases : if the transaction involves the purchase of a new lease with a substantial rent there may be an additional SDLT charge to that shown below based on the rent. Residential land or property SDLT rates and thresholds Transfers Of Land And Buildings : Consideration Paid
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If the value is above the payment threshold, SDLT is charged at the appropriate rate on the whole of the amount paid : for example a house bought for £130.000 is charged at 1%, so £1300 must be paid in SDLT : a house bought at £350.000 is charged at 3%, so SDLT of £10.500 is payable.
Note : that between September 2008 and December 2009 the starting threshold for SDLT was £175.000 : higher than shown in the table above : the threshold was reduced back to £125.000 from 1st January 2010.
Properties bought in a disadvantaged area.
If the property is in an area designated by the government as ‘disadvantaged’ a higher threshold of £150.000 applies for residential properties.
SDLT on rent : new residential leasehold purchase.
When a new residential lease has a substantial annual rent, SDLT is payable on both of the following, which are calculated separately and then added together :
- the lease premium (purchase price) : see table above
- the ‘net present value’ (NPV) of the rent payable
In practice SDLT only becomes payable on a fairly high rent : starting at around £4500 a year for a 99 year lease, for example, however the exact amount depends on the length of the lease
INLAND REVENUE : SDLT WEBSITE