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Expert Guide

Guide to stamp duty for buy-to-let landlords

Stamp duty for a limited company

This section only applies to limited company property portfolios

Now, let’s look at the stamp duty rules for company owned and corporate owned residential and non-residential properties.

Residential property

Limited companies will always pay the 3% stamp duty surcharge on top of the standard stamp duty rate on any residential property purchased above £40,000. This is the case whether it's the first property purchased by the company or not.

Those based outside the UK who are purchasing property via a limited company will pay a 2% additional SDLT surcharge rate for non-residents.

Property priceStandard Stamp Duty rateBuy-to-let Stamp Duty rate
£0 to £250,0000%3%
£250,001 to £925,0005%8%
£925,001 to £1.5m10%13%

Commercial and mixed-use property (non-residential)

For all non-residential or mixed-use properties purchased by the company, the regular freehold and leasehold non-residential rates apply. There is no 3% surcharge on non-residential properties for companies.

Do I pay stamp duty when incorporating my properties into a company?

Yes, incorporating a property portfolio is a legal transfer of ownership from an individual to a separate entity (the limited company) and this will trigger stamp duty and capital gains tax charges.

Stamp duty is paid on the market value at the date of transfer and applies regardless of whether cash is paid or shares are given for the properties or the properties are gifted to the limited company.

Partnership stamp duty relief (Schedule 15)

If you’re running your property business and are married or in a civil partnership, a registered partnership or an LLP, you could be eligible for S15 land and buildings SDLT relief on incorporation of the property.

Need custom advice about stamp duty for limited companies? Book a tax consultation →

Why do I have to pay a surcharge on buy-to-let properties?

In 2015, the Chancellor announced a 3% additional rate of Stamp Duty on purchases of additional properties, which was implemented in April 2016. This was designed to target purchasers of second homes and property investors in an attempt to slow the growth of the buy-to-let market. The 3% automatically applies to any limited company purchase, as above.

Corporate owned:

Certain corporate bodies purchasing residential properties over £500k are charged a flat rate of 15% SDLT. This applies to companies, partnerships and investment schemes. This is quite a tricky area of stamp duty land tax - we recommend gaining professional advice on your specific circumstances.

For example, if a 5 bed property was purchased by a company for one of the directors to live in, the company would have to pay 15% SDLT (as well as Annual Tax on Enveloped Dwellings - ATED) charges.

However, if the same 5 bed property was purchased by the company to house employees, the 15% flat rate would not apply, but the 3% surcharge would on the usual residential rates.

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