Stamp Duty or SDLT are both short forms of Stamp Duty Land Tax.
Stamp Duty is a tax payable when residential property (both freehold and leasehold) is purchased in the UK over a certain threshold. As of 23 September 2022, the threshold is £250,000 (previously it was £125,000), and if the purchaser is a first time buyer, certain reliefs apply.
However, investors who already own another residential property pay an additional 3% stamp duty surcharge on top of the usual SDLT rates.
SDLT rates for landlords from 23 September 2022*
On 23 September 2022, the newly appointed Chancellor of the Exchequer, Kwasi Kwartang, raised the nil-rate threshold for stamp duty from £125,000 to £250,000 for properties where it is the buyer’s main home and they don’t own another property.
However, the extra 3% paid by those who are buying a second property, as a second home or landlord, has been kept. Consequently, for property investors, the overall SDLT payable reduced a little from the increase in the basic threshold to £250k.
Here are the rates for those buying an additional property:
|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%|
* Assuming the inves owns another property
Worked example for an additional property of £300k
As a result, raising of the standard nil-rate threshold to £250,000 has had the effect of reducing the SDLT payable by property investors on a purchase of £300k by £2,500.
By way of example, here’s the breakdown of how the SDLT is calculated from 23 September 2022 for a £300k property:
|Purchase price bands (£)||Percentage rate (%)||SDLT due (£)|
|The first £250,000||3||£7,500|
|Above £250,000 and up to £925,000||8||£4,000|
|Above £925,000 and up to £1,500,000||13||0|
|Total SDLT due||£11,500|
Lastly, note that there is an additional surcharge of 2% for buyers who aren’t resident in the UK.
Stamp duty calculator – the official one from the GOV.uk Tax Service.
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