Stamp duty for a limited company
Now, let’s look at the stamp duty rules for company owned and corporate owned residential and non-residential properties.
Residential
A company will always pay the 3% surcharge on any residential property purchased above £40,000. This is the case whether it's the first property purchased by the company or not.
Non-residential
For all non-residential or mixed-use properties purchased by the company, the regular non-residential rates apply. (There is no 3% surcharge on non-residential properties for companies.)
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.
Need custom advice about stamp duty for limited companies?
Book a personalised tax consultationStamp Duty Buy-to-Let Rates
View ratesSpend more time on your properties and less time on tax with our monthly newsletter.