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 £250,000 | 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 |
| Above £1,500,000+ | 15 | 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.
Useful resources
- GOV.uk guide
- Stamp duty calculator – the official one from the GOV.uk Tax Service.