Guide to stamp duty for buy-to-let landlords
Stamp duty rates for buy-to-let
The following chapter details the stamp duty rates for buy-to-let property purchases, both residential and non-residential.
Residential BTL stamp duty rates
From 23 September 2022
Buy-to-let, second home owners, and limited companies pay a 3% surcharge on top of residential SDLT rates.
| Property price | Standard Stamp Duty rate | Buy-to-let Stamp Duty rate |
|---|---|---|
| £0-£40,000 | 0% | 0% |
| £0 to £250,000 | 0% | 3% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5m | 10% | 13% |
| £1.5m+ | 12% | 15% |
Non-UK Resident / Overseas buyer stamp duty rates from 1st April 2021
If you are a non-UK resident or company purchasing property in England or Northern Ireland, from April 2021 an additional 2% stamp duty surcharge will apply on top of existing stamp duty rates.
If you already own properties (either abroad or in the UK), you’ll also need to pay the 3% stamp duty surcharge on additional properties, such as buy-to-lets and holiday lets.
Non-UK companies have to pay both the 2% and 3% surcharges when purchasing residential property.
| Property price | Standard Stamp Duty rate | Overseas buyer stamp duty rate |
|---|---|---|
| £0-£250,000 | 0% | 5% |
| £250,001-£925,000 | 5% | 10% |
| £925,001-£1.5m | 10% | 15% |
| £1.5m+ | 12% | 17% |
Looking to set up a property company?
Non-residential (commercial) stamp duty rates
When purchasing non-residential or mixed use property (or land), stamp duty is paid on increasing portions of the property price of £150,000 or more.
Non-residential property for stamp duty purposes is defined by HMRC as:
commercial property, such as shops or offices
property that isn’t suitable to be lived in
agricultural land that’s part of a working farm or used for agricultural reasons
any other land or property that is not part of a dwelling’s garden or grounds
6 or more residential properties bought in a single transaction
Freehold non-residential (commercial property) stamp duty rates
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| The remaining amount (the portion above £250,001) | 5% |
Leasehold non-residential (commercial property) stamp duty rates
When you buy a new non-residential or mixed leasehold you pay SDLT on both the:
purchase price of the lease (the ‘lease premium’) using the rates above
value of the annual rent you pay (the ‘net present value’)
The net present value (NPV) is based on the total rent over the life of the lease. You do not pay SDLT on the rent if the NPV is less than £150,000.
| Net present value of rent | SDLT rate |
|---|---|
| £0 to £150,000 | 0% |
| The portion from £150,001 to £5,000,000 | 1% |
| The portion above £5,000,000 | 2% |
Everything you need to manage your limited company's tax
Whenever you’re ready, here are 4 ways we can help you start and manage your buy-to-let limited company taxes:
Tax Advice. Talk through your options and increase your confidence by booking a tax consultation with our Chartered Property Tax Advisors.
Company Start Up. For a smooth start and to avoid costly mistakes, our expert team can incorporate your limited company, for less than you think.
Accounting Tax App. Keep on top of your finances in minutes, and prepare and directly submit your accounts and tax returns, with our easy-to-use property accounting app, designed specifically for landlords.
Advisory Service. As your portfolio expands, the complexity of your financial needs grows too. Provestor’s Advisory Service is the next step for investors seeking a deeper level of support and tax expertise.
Was this helpful?
