Stamp Duty for landlords

Stamp duty for buy to let landlords

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 then 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 £250,0003%
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 £250,0003£7,500
Above £250,000 and up to £925,0008£4,000
Above £925,000 and up to £1,500,000130
Above £1,500,000+150
Total SDLT due£11,500
Source: Tax Service Calculator

Lastly, note that there is an additional surcharge of 2% for buyers who aren’t resident in the UK.

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