Conveyancing Myth Busters No.2
“Stamp Duty Land Tax has to be paid by everyone”
Stamp Duty Land Tax (often referred to as SDLT) is a property tax imposed by the Government that is payable when property is purchased. This has to be paid, you cannot opt out of paying it.
Stamp Duty is not payable in certain circumstances and HM Revenue & Customs publishes a list of these on its website. For example, on any purchase under £40,000 first time buyers get relief from SDLT and property transferred because of divorce or dissolution of a civil partnership is exempt from the tax. Similarly, if you are left property in a Will no SDLT is payable.
It is not just on a new purchase SDLT is payable. There may be SDLT to pay on purchasing the share of an outgoing co-habiting partner.
The current rates for SDLT are based on the purchase price of the property:-
Up to £250,000 zero.
£250,001 to £925,000 is 5%.
£925,001 to £1.5 million is 10%
Above £15 million is 12%
There will be additional SDLT (often referred to as higher rate SDLT) to pay if you are purchasing an additional property to that of your main residence.
However, you can get a refund on the second home surcharge if you sell your main residence within three years of paying the additional 3% SDLT.
There are different rates for residential property and non residential.
So, not everyone has to pay SDLT but as you can see from the above there are many and varied circumstances as to who pays and how much needs to be paid.
Your solicitor will advise you as whether SDLT is payable on your purchase and if appropriate they will submit an SDLT return and pay the Stamp Duty to HMRC on completion of your transaction.