Quick Guide to SDLT

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Our quick guide to Stamp Duty Land Tax (SDLT)

They say its one of the only certainties in life, so here is our quick guide to tax on your new home.

When buying a residential property in England, you may be liable to pay a tax depending on the value of the property. This tax is called Stamp Duty Land Tax or SDLT for short.

SDLT is calculated using a banding system, with different rates applied to each new band on the property’s value.

Current rates for legal completions from 1st July to 30th September 2021 are as follows:

£0 to £250,000 - 0%
The next £675,000 (the portion from £250,001 to £925,000) - 5%
The next £575,000 (the portion from £925,001 to £1.5 million) - 10%
The remaining amount (the portion above £1.5 million) - 12%

For example, if you buy a Freehold house on 1st August for £550,000, the SDLT you will pay will be:

0% on the first £250,000 = £0
5% on the next £300,000 = £15,000

Total SDLT = £15,000

For other purchase prices, here is a link to the Government SDLT Calculator

Rates from 1st October 2021 are as follows:

£0 to £125,000 - 0%
The next £125,000 (the portion from £125,001 to £250,000) - 2%
The next £675,000 (the portion from £250,001 to £925,000) - 5%
The next £575,000 (the portion from £925,001 to £1.5 million) - 10%
The remaining amount (the portion above £1.5 million) - 12%

For example, if you buy a Freehold house on 1st November for £550,000, the SDLT you will pay will be:

0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the next £300,000 = £15,000

Total SDLT = £17,500

For other purchase prices, here is a link to the Government SDLT Calculator

If you already own a property and are looking to buy another, as a second home or buy-to-let for example, you will likely be liable to pay an additional 3% on the entire value of the property.

There are exemptions available in certain circumstances, such as buying a new main residence, which are beyond the scope of this article. For more info, please see GOV.uk. You may also be able to claim the additional 3% back if you sell your original property within 3 years of purchasing your new home.

If you are a First Time Buyer purchasing a property you intend to live in as your main residence then you will likely be eligible for First Time Buyer relief on your SDLT payment. If you qualify, you will pay:

No SDLT on the first £300,000

5% SDLT on the portion from £300,001 to £500,000

You’re eligible if you and anyone else you’re buying with are first-time buyers.

If the price is over £500,000, you follow the rules for people who’ve bought a home before.

Don’t worry, your conveyancing solicitor will calculate the amount of SDLT due and request funds from you for this accordingly. They will submit a Stamp Duty Land Tax return on your behalf when the transaction is due to legally complete.

We hope this has been a useful Quick Guide to SDLT for you. For more information please get in touch with us as we can connect you with one of our panel IFA’s or Solicitors who will be happy to give you free advice on your individual circumstances.

Oh and before we go, keep an eye out for deals on the Robertson Homes development you’re interested in – we may just be offering to pick up the SDLT tab for you!

If you still have any questions please contact a member of the Robertson Homes team who are always on hand to provide more information.

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