Guide to stamp duty for buy-to-let landlords
What is stamp duty?
First of all, let’s look at the basics of stamp duty: what is it? How much is it and when/how do you pay it?
What is stamp duty?
Stamp duty (also known as Stamp Duty Land Tax or SDLT) is the tax that must be paid when purchasing property or land over a certain price. Stamp duty is always paid by the buyer, not the seller of the property.
Stamp Duty Land Tax only applies in England and Northern Ireland; there are different taxes in Scotland and Wales.
In Scotland, buyers pay the Land and Buildings Transaction Tax.
In Wales, buyers pay the Land Transaction Tax.
How much is it?
There are varying rates of stamp duty, depending on whether you are a first time buyer, if you already own property and if you are a non-UK resident/entity.
Regular stamp duty is charged on a tiered basis, similar to income tax, so you only pay higher rates on the portion above the threshold.
Here’s a quick overview of residential SDLT rates:
First time buyers
No SDLT up to £425,000, then 5% SDLT on the portion from £425,001 to £625,000.
Home movers (replacing your main home/residence)
Zero SDLT up to £250,000, then incremental increases (starting from 5% from £250,001 to £925,000)
Buy-to-let, second home owners, and limited companies
3% surcharge on top of residential SDLT rates
Non-UK residents/companies
2% surcharge on top of residential rates (non-UK companies also must pay the 3% as above)
And non-residential (commercial) rates:
Individuals or companies buying freehold commercial property, mixed-use property or land pay:
Zero SDLT up to £150,000, then 2% on the next £100,000 and 5% on the remaining amount
We explore Stamp Duty rates and thresholds in more detail in chapter 4
Skip to Stamp Duty Buy-to-Let RatesHow to pay stamp duty
Property buyers have 14 days from completion to send a SDLT return and make payment to HMRC - if you are using a solicitor or conveyancer, this will usually be handled by them for you.
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