These rates are applicable until 31 March 2025
Understanding Stamp Duty Land Tax When Buying a Home
If you're, in the midst of buying a property in England one important factor to keep in mind is Stamp Duty Land Tax (SDLT). This tax applies to transactions involving land and property and failing to comply can lead to fines. In this blog post we'll explore the details of SDLT giving you the insights for navigating this aspect of the home buying journey.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax is a tax that must be paid to Her Majestys Revenue and Customs (HMRC) when you purchase a property or land in England or Northern Ireland. The amount of SDLT you'll be required to pay is determined by the propertys purchase price and whether you're a first time buyer or an existing homeowner.
SDLT Rates for Residential Properties
According to the information here are the current stamp duty land tax (SDLT) rates, for buying residential properties in England;
Rates for a Single Residential Property
If you are buying a residential property and it's the only residential property you own after the purchase, you pay SDLT at the following rates:
Up to £250,000: 0%
£250,001 to £925,000: 5% on this portion
£925,001 to £1.5 million: 10% on this portion
Over £1.5 million: 12% on this portion
For example, if you buy a house for £295,000, you would pay:
0% on the first £250,000 = £0
5% on the remaining £45,000 = £2,250
Total SDLT = £2,250
Relief for First-Time Buyers
If you are a first-time buyer purchasing your first home, you can claim a relief and pay:
0% SDLT up to £425,000
5% SDLT on the portion from £425,001 to £625,000
To qualify for this relief you must not have previously owned a property. Should anyone else you are purchasing with. If the price of the property goes over £625,000 then the standard rates will be applied.
When it comes to leasehold properties Stamp Duty Land Tax (SDLT) is calculated based on two factors;
1) The purchase price, using the rates mentioned earlier.
2) If the total rent payable, throughout the lease period goes over £250,000, an additional 1% SDLT is due, on the amount exceeding £250,000.
SDLT Rates for Second Homes and Additional Properties
In cases involving second property purchases higher rates are applicable:
5% SDLT up to £250,000
10% SDLT from £250,001 to £925,000
15% SDLT from £925,001 to £1,500,000
17% SDLT from £1,500,001
This is just a brief summary, you can check the HMRC site for further information.
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