SDLT
Transferring ownership (conveyancing)
Once the offer is accepted
The seller is responsible for drawing up a legal contract to transfer
ownership.
The contract contains details about:
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the sale price
the property boundaries
which fixtures and fittings (like carpets and kitchen units) are
included
any legal restrictions or rights, like public footpaths or rules
about using the property
any planning restrictions
services to the property, like drainage and gas
when the sale will complete
If the seller has hired a solicitor or conveyancer, they will:
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draft the initial contract
answer questions from the buyer’s solicitor or conveyancer
(with the seller’s help)
negotiate the details of the contract if necessary
Exchanging contracts
When the buyer and seller are happy with the contract, both sides
sign final copies and send them to each other.
The agreement to sell and buy is legally binding once this happens.
Usually neither party can pull out without paying compensation.
Completion
Once you exchange contracts and deal with any remaining checks the
buyer has asked for:
1. The money is transferred from the buyer to the seller.
2. The legal documents needed to transfer ownership are handed
over to the buyer.
3. The seller moves out and leaves the property in the state agreed
in the contract.
4. The seller hands over the keys to the buyer.
5. The property now belongs to the buyer.
If you have a solicitor, agent or conveyancer, they’ll usually file your
return and pay the tax on your behalf on the day of completion. They’ll
then add the tax to their fees.
If they do not do this for you, you can file a return and pay the
tax yourself.
You may be charged penalties and interest if you do not file
your return and make your payment within 14 days of
completion.
SDLT
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or
land over a certain price in England and Northern Ireland.
You pay the tax when you:
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buy a freehold property
buy a new or existing leasehold
buy a property through a shared ownership scheme
are transferred land or property in exchange for payment, for
example you take on a mortgage or buy a share in a house
Thresholds
The threshold is where SDLT starts to apply. If you buy a property for
less than the threshold, there’s no SDLT to pay.
The current SDLT thresholds are:
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£250,000 for residential properties
£425,000 for first-time buyers buying a residential
property worth £625,000 or less
£150,000 for non-residential land and properties
How much you pay depends on:
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whether the land or property will be used as a residential
property or as a non-residential or mixed-use property
whether you are eligible for relief or an exemption
For example, if you’re buying a residential property there are different
rates of SDLT if:
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you’re a first-time buyer
you already own a property and you’re buying an additional
property
you’re not a UK resident
The value you pay SDLT on (the ‘consideration’)
The total value you pay SDLT on (sometimes called the
‘consideration’) is usually the price you pay for the property or land.
Sometimes it might include another type of payment like:
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goods
works or services
release from a debt
transfer of a debt, including the value of any outstanding
mortgage
How and when to pay
Send an SDLT return to HMRC and pay the tax within 14 days of
completion.
You must tell HMRC about most England and Northern Ireland land
and property transactions. Use a Stamp Duty Land Tax (SDLT) return.
This must be within 14 days of the ‘effective date’ of the transaction,
even if you do not owe any tax.
The effective date is usually the date the transfer completes, but it can
be the date the contract is ‘substantially performed’ if this is before
completion. ‘Substantial performance’ is when one of the following
happens:
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most of the buying price is paid – normally 90% and payment
can be in cash or something else of economic value
the buyer is entitled to possession of the property
the first payment of rent is made
The payment deadline is the same as the return. You can pay
any SDLT as soon as you’ve submitted the return.
Who must send a return
It’s your responsibility to tell HMRC and pay any SDLT you owe. Most
people use a solicitor or legal conveyancer to act on their behalf.
Solicitors or legal conveyancers can submit your return online and pay
any tax due once we:
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have their authority on record
know the effective date of the transaction
If you’re not represented by a solicitor or legal conveyancer you must
use the SDLT1 paper return.
Some land and property transactions do not need a SDLT return,
including:
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transactions where no money or other payment changed
hands
property left to you in a will
property transferred because of divorce or civil partnership
dissolution
How to send paper returns to HMRC
If you need to send HMRC a paper SDLT1 return and your transaction
is straightforward, such as a simple residential conveyance, use the
SDLT1.
Send the completed SDLT1 to us together with payment of
any SDLT due on the transaction. Do not include any other
correspondence with the SDLT1 return as it may delay us sending
you the SDLT5 certificate.
Register land or property with HM Land
Registry
You should send the SDLT5 certificate to HM Land Registry with the
application for registration.
Penalties if you file or pay late
You’ll pay an automatic fixed penalty if you do not file your return by
the filing date. The amount of the penalty depends on how late you file
your return.
Interest charges
You must pay any SDLT due within 14 days after the effective date of
the transaction. If you pay the tax late, you’ll pay interest from the day
after you should have paid it until the day you pay it.
You should pay the tax and the interest as soon as possible.
How to amend a return
You’ve 12 months from the filing date to amend your return. The filing
date is 14 days after the effective date of your transaction.
These include:
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vendor details
buyer details on either questions 59 or 70 of the SDLT1 paper
return
some spelling errors in the property address
question 26 or 72 of your paper return if you’ve received a
SDLT8 showing you’ve made a mistake
wrong title number
correcting the purchase price or other tax details
You can also change the effective date of the transaction. You cannot
change it to a date that would mean HMRC received the return before
the completion date. If this applies you’ll need to:
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send us a new SDLT1 return
write to the Stamp Duty Land Tax office asking to cancel the
wrong return
If the change means you’ve paid:
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too much tax, you can ask for a refund
not enough tax, you must pay this amount right away
If you’ve underpaid SDLT
You must tell HMRC as soon as you realise you’ve underpaid SDLT.
You should pay the additional SDLT as soon as possible quoting
the UTRN of the transaction.
If you do not, you may have to pay a penalty. You’ll have to pay
interest on any SDLT that you pay late.
If you think you’ve overpaid SDLT, you can apply for a refund.
Published 28 November 2018
Residential property rates
You usually pay Stamp Duty Land Tax (SDLT) on increasing portions
of the property price when you buy residential property, for example a
house or flat.
SDLT only applies to properties over £250,000.
The amount you pay depends on:
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when you bought the property
how much you paid for it
whether you’re eligible for relief or an exemption
Rates for a single property
You pay stamp duty at these rates if, after buying the property, it is the
only residential property you own. You usually pay 3% on top of these
rates if you own another residential property.
Property or lease premium or transfer value
SDLT rate
Up to £250,000
Zero
The next £675,000 (the portion from £250,001 to £925,000)
5%
The next £575,000 (the portion from £925,001 to £1.5
million)
10%
The remaining amount (the portion above £1.5 million)
12%
Example
In October 2022 you buy a house for £295,000. The SDLT you owe
will be calculated as follows:
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0% on the first £250,000 = £0
5% on the final £45,000 = £2,250
Total SDLT = £2,250
If you’re buying your first home
You can claim a discount (relief) if the property you buy is your first
home. This means you’ll pay:
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No SDLT up to £425,000
5% SDLT on the portion from £425,001 to £625,000
You’re eligible if you and anyone else you’re buying with are first-time
buyers.
If the price is over £625,000, you cannot claim the relief. Follow the
rules for people who’ve bought a home before.
Example
You are a first-time buyer and purchase a property for £500,000. The
SDLT you owe will be calculated as:
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0% on the first £425,000 = £0
5% on the remaining £75,000 = £3,750
total SDLT = £3,750
New leasehold sales and transfers
When you buy a new residential leasehold property you pay SDLT on
the purchase price of the lease (the ‘lease premium’) using the rates
above.
If the total rent over the life of the lease (known as the ‘net present
value’) is more than the SDLT threshold (currently £250,000), you’ll
pay SDLT at 1% on the portion over £250,000.
This does not apply to existing (‘assigned’) leases.
Higher rates for additional properties
You’ll usually have to pay 3% on top of SDLT rates if buying a new
residential property means you’ll own more than one.
If you’re replacing your main residence
You will not pay the extra 3% SDLT if the property you’re buying is
replacing your main residence and that has already been sold.
If you have not sold your main residence on the day you complete
your new purchase you’ll have to pay higher rates. This is because
you own 2 properties.
You can apply for a refund if you sell your previous main home within
36 months.
If it takes longer than 36 months to sell your previous main home
You may still be able to get a refund of the extra 3% SDLT if all of the
following apply:
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you purchased your new home on or after 1 January 2017
exceptional circumstances stopped you from selling your old
home, for example government restrictions because of
coronavirus (COVID-19) or a public authority blocking the sale
you have now sold your old home
To claim a refund, write to HMRC and explain why the sale took
longer than 36 months.
Rates if you’re not a UK resident
If you’re not present in the UK for at least 183 days (6 months) during
the 12 months before your purchase you are ‘not a UK resident’ for
the purposes of SDLT.
You’ll usually pay a 2% surcharge if you’re buying a residential
property in England or Northern Ireland.
You may not have to pay a surcharge on certain properties,
transactions or if you’re a particular type of buyer. Check the rules on
who has to pay the surcharge, when you do not have to pay, and if
you can claim relief.
If you have to pay the surcharge, you’ll also have to pay any other
rates of SDLT that apply, for example:
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if you already own a property and you’re buying an additional
property
if you’re a first-time buyer
Land and property transfers
You may have to pay Stamp Duty Land Tax (SDLT) if the ownership
of land or property is transferred to you in exchange for any payment
(or ‘consideration’).
The rules around SDLT depend on the specific circumstances
surrounding the transfer.
HM Revenue and Customs (HMRC) has guidance on transfers:
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as a result of marriage, civil partnerships or moving in
together
on divorce, separation or the end of a civil partnership
of jointly owned property or land
if the larger share is given as a gift
given as a gift or left in a will
to or from a company
Reliefs and exemptions
You may be eligible for Stamp Duty Land Tax (SDLT) reliefs if you’re
buying your first home and in certain other situations. These reliefs
can reduce the amount of tax you pay.
You must complete an SDLT return to claim relief, even if no tax is
due.
HM Revenue and Customs (HMRC) has guidance on SDLT reliefs for:
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first-time buyers
multiple dwellings
building companies buying an individual’s home
employers buying an employee’s house
local authorities making compulsory purchases
property developers providing amenities to communities
companies transferring property to another company
charities buying for charitable purposes
right to buy properties
registered social landlords
Crown employees
property investment funds, for example Property Authorised
Investment Funds (PAIFs) and Co-ownership Authorised
Contractual Schemes (CoACSs)
Exemptions
You do not have to pay SDLT or file a return if:
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no money or other payment changes hands for a land or
property transfer
property is left to you in a will
property is transferred because of divorce or dissolution of a
civil partnership
you buy a freehold property for less than £40,000
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you buy a new or assigned lease of 7 years or more, as long
as the premium is less than £40,000 and the annual rent is
less than £1,000
you buy a new or assigned lease of less than 7 years, as long
as the amount you pay is less than the residential
threshold or non-residential threshold of SDLT
you use alternative property financial arrangements, for
example to comply with Sharia law
Items not included in the chargeable consideration
When the sale price includes a payment for items that are not part of
the chargeable consideration, they must be valued at a rate reflecting
their fair market value.
For example, if the seller includes carpets in the sale, the buyer and
seller must agree a fair price bearing in mind their age and quality.
Subtract this from the price paid to get the chargeable consideration.
Higher rates of Stamp Duty Land Tax
You must pay the higher Stamp Duty Land Tax (SDLT) rates when
you buy a residential property (or a part of one) for £40,000 or more, if
all the following apply:
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it will not be the only residential property worth £40,000 or
more that you own (or part own) anywhere in the world
you have not sold or given away your previous main home
no one else has a lease on it which has more than 21 years
left to run
Who the higher rates apply to
You may have to pay the higher rates even if you intend to live in the
property you’re buying (and regardless of whether or not you already
own a residential property).
This is because the rules do not apply only to you (the buyer), but also
to anyone you’re married to or buying with.
If you’re married or in a civil partnership
The rules apply to you both as if you were buying the property
together, even if you’re not. If either of you individually have to pay the
higher rates, you must pay the higher rates for the transaction as a
whole (unless you’re permanently separated).
Buying with someone else
The rules apply to each person (and their spouse) who is buying the
property. If any of you individually have to pay the higher rates, you
must pay the higher rates for the transaction as a whole.
If you’re buying as a trustee
The rules may apply to the beneficiary of the trust and not to you,
depending on the type of trust it is.
What property the higher rates apply to
When you know who the rules apply to, you should work out how
many residential properties each of you will own at the end of the day
of your new purchase.
If any of you will own, or part own more than one residential property
worth £40,000 or more, you will have to pay the higher rates on your
new purchase (unless there is another reason why the higher rates do
not apply).
Include any residential property that:
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is owned on behalf of children under the age of 18 (parents
are treated as the owners even if the property is held through
a trust and they are not the trustees)
you have an interest in as the beneficiary of a trust
Include your current home, if you still own it at the end of the day you
buy your new home.
The higher rates from 23 September 2022
Property or lease premium or transfer value
SDLT
rate
Up to £250,000
3%
The next £675,000 (the portion from £250,001 to £925,000)
8%
The next £575,000 (the portion from £925,001 to £1.5
million)
13%
The remaining amount (the portion above £1.5 million)
15%
Example
If you own a house which is your main residence. On the 23
September 2022 you buy an additional residential property for
£300,000. On completion of the purchase you own more than one
property. The SDLT you owe on the purchase will be calculated as
follows:
1. 3% on the first £250,000 = £7,500
2. 8% on the final £50,000 = £4,000
3. Total SDLT = £11,500
When the higher rates do not apply
The higher rates do not apply to certain people, property and
transactions.
People
Do not include anyone who will both:
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use your new property as their main home
have sold or given away the last main home they owned
before you buy your new home (or on the same day)
Property
Do not include property (or part of a property) if any of the following
apply:
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the property is worth less than £40,000
it’s a mixture of residential and non-residential (like a shop
with a flat above it)
it’s ‘moveable’ like a caravan, houseboat or mobile home
(unless it has become a permanent fixture)
The rules also do not apply to property you lease if either:
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your lease is for 7 years or less (on the date it was granted)
the lease is owned by someone else and it has more than 21
years left
Transactions
If you’re transferring ownership (or part ownership) of a residential
property to your spouse, the higher rates do not apply as long as no
one else is involved in the transfer.
If you want to increase the amount of a property that you already own,
you do not have to pay the higher rates when all the following apply:
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you already own 25% or more
the dwelling has been your only or main home for the previous
3 years
if you’re extending a lease, your lease still has 21 years or
more left to run
SDLT rates for non-UK residents
There is a 2% surcharge on residential properties in England and
Northern Ireland bought by non-UK residents on or after 1 April 2021.
The 2% surcharge applies on top of all other residential rates
of SDLT including the higher rates for additional dwellings.