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Understanding Stamp Duty Land Tax

21 March, 2018

Stamp duty land tax or SDLT is a tax paid when purchasing property or land across England, Northern Ireland and Wales. A separate Land and Buildings Transaction Tax now applies in Scotland.

If you're wondering who pays stamp duty, the tax is only payable when a purchase amounts to a certain price. For residential properties, this is up to £125,000, and up to £150,000 for land and non-residential property. If you're a first time buyer, there is a different threshold which is detailed below.

The tax applies when buying new or existing freehold and leasehold properties, purchasing through a shared ownership scheme, or when you are given land or property in exchange for a payment.

Current Freehold Rates

A breakdown of the current freehold residential stamp duty rates 2018 are as follows:

Property Value

1 Home

2 or More Homes

£0 > £125,000



£125,001 > £250,000



£250,001 > £925,000



£925,001 > £1.5m



1.5m +



Data as seen on Gov.uk

When buying a home that means you will own 2 or more residential properties at one time, percentage rates are each increased by 3%, including properties in the under £125,000 bracket which are therefore taxed 3% stamp duty.

Leasehold Rates

When buying a leasehold property for residential use you are expected to pay stamp duty tax on the lease's purchase price using the above rates. When the rent over the total period of the lease is over £125,000, a tax of 1% on the portion exceeding this amount is also due.

First Time Buyers of Residential Property

Stamp duty is one of the additional fees you must consider when buying your first property. According to new stamp duty laws, first time buyers are excused from paying stamp duty on properties of up to £300,000 and will receive added discounted rates on those of up to £500,000.

In short, buyers of properties worth between £300,001 and £500,000 are entitled to tax exemption on the £300,000 and a further 5% on the remaining portion.

Non-Residential and Mixed Use Land and Property

Non-residential properties span the commercial sector, agricultural land and forests, and any other classification of property or land that is not residential. In addition to this, 6 or more residential properties purchased as one in a solo transaction are considered a non-residential property.

Mixed use land or property is where both residential and non-residential constituents are combined.

Properties or land worth up to £150,000 do not require a stamp duty tax to be paid.

Where do you Pay Stamp Duty?

How and where to pay stamp duty is another frequently asked question for both first time and returning buyers. You must send a stamp duty land tax return to HMRC and pay the tax within 30 days of completion. Failure to do this could result in penalties and interest.

It's common for solicitors, agents and conveyances to deal with this for you by sending your return to HMRC and paying the tax during the final stages. This would simply be added into their fees.

Stamp Duty Reserve Tax

Stamp Duty Reserve Tax should not be confused with stamp duty land tax as it is paid on the purchase of paperless shares.

Please note that stamp duty land tax rates can alter at any given time as well as the conditions for reliefs and exemptions, so be sure to check them again when buying a property. For full information on stamp duty land tax please click Here.

For information on property investment opportunities contact RWinvest on +44 (0)151 808 1250 Email: info@rw-invest.com or visit our website.

About the Author


With over 14 years of experience, RWinvest is a market leading UK property investment company with offices in London, Liverpool and Manchester. We specialise in buy to let investment and offer our clients support in buying rental property, providing them with exclusive access to high quality residential and student new build properties across the Northern Powerhouse. www.rw-invest.com


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