If you are just beginning to think about buying your first home and applying for a mortgage, there are things you need to know to ensure the process goes as smoothly as possible. This week we will be discussing Stamp Duty Land Tax, what it is exactly and what you need to know about it. Let’s get started.

What is Stamp Duty Land Tax?

Stamp Duty Land Tax or SDLT is a tax placed by the government on the purchase of different categories of property over a certain price or threshold. The property categories are:

  • Freeholds
  • Leaseholds
  • Shared ownership schemes
  • Properties that you have exchanged for payment via a mortgage or buying shares in a house.

The Property duties will vary depending on whether you are based in the UK and Northern Ireland (SDLT) or Scotland (Known as Land and Buildings Transaction Tax) and Wales (Known as Land Transaction Tax)

According to gov.uk, In the UK from September 2022, the following thresholds apply to SDLT;

  • £250,000 for residential properties  
  • £425,000 for first-time buyers buying a residential property worth £625,000 or less
  • £150,000 for non-residential land and properties

If your property price is below these thresholds based on the type of property you are buying, you will not be liable for SDLT and will have nothing to pay.


How Much Will I Pay?

The amount of SDLT you will pay depends on a few factors including whether you will be using the property as a residential property, a non-residential or a mixed use property. Another consideration is whether you are exempt from paying SDLT due to personal circumstances. There are also different rates of SDLT which depend on whether you are a first time buyer, you are already a property owner or if you aren’t a resident of the UK.

Gov.uk has a Stamp Duty Land Tax calculator to help you find out what you will need to pay based on your circumstances. You can find it here:


Is There Anything Else I Need to Know?

You will need to fill in a SDLT return and send it to HMRC within 14 days of the completion of your property purchase if you are taking care of this yourself. If you are working with a solicitor, they will often complete and pay SDLT for you as part of their service and include it in their overall fees to you. You could be liable for extra fees to the HMRC if the SDLT return is received after the requested 14 days.

We hope this blog has helped you understand Stamp Duty Land Tax. If you need some more expert advice around buying your next home, re-mortgaging or selling your current home or looking for your next rental property, our team are on hand and happy to help. Contact us here to book an appointment.