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Buying residential property – Stamp Duty Land Tax (SDLT)



In the third of our series of articles about buying property in England, Residential Property Partner, Alison Treble explains your Stamp Duty Land Tax (SDLT) liability both now while the nil rate band has been temporarily increased and after March 2021 when the stamp duty holiday ends.

What is Stamp Duty Land Tax? (SDLT)

Stamp Duty is a tax you pay if you buy a residential property or a piece of land in England and Northern Ireland. While often referred to as Stamp Duty Land Tax (SDLT), that’s only the name in England and Northern Ireland – it’s different in Scotland and Wales, where it’s known as ‘land and buildings transaction tax’ and ‘land transaction tax’ respectively.

The crucial thing to know about SDLT, if you’re buying in England or Northern Ireland, is that you have 14 days from the date of completion to pay Her Majesty’s Revenue and Customs (HMRC). Take longer than 14 days and you could face a fine and possibly interest on top.

How much stamp duty will I pay now?

At the moment any residential property transactions that complete between 8 July 2020 and 31 March 2021, the Chancellor has announced a temporary ‘stamp duty holiday’ whereby the nil rate band has increased from £125,000 to £500,000. This applies to everyone including first time buyers, those who already own property and property investors.

During the time that the ‘stamp duty holiday’ is in force, buyers will only start paying SDLT on amounts above £500,000. For those purchasing a second property while they will still benefit from the ‘stamp duty holiday’ they are still required to pay the additional 3% SDLT surcharge for additional dwellings.

What will I pay after the stamp duty holiday ends?

From the 1 April 2021 the reduced rates applicable during the ‘stamp duty holiday’ will revert to the rates of SDLT that were in place prior to 8 July 2020.

In England, every property transaction completed in excess of £125,000 is liable to pay SDLT at varying levels depending in the cost of the property and if it a second property.

Property PriceSDLT RateSecond Property
Up to £125,0000%+3%
£125,000 to £250,0001%+3%
£250,000 to £500,0003%+3%
£500,000 to £1,000,0004%+3%
£1,0500,000 to £2,000,0005%+3%
Over £2,000,0007%+3%

If you are planning on buying or selling a residential property, it is important that you appoint a specialist residential property lawyer to act for you to ensure your interests are protected at all times. Get in touch today with our Residential team on 01225 750000 or email Alison.treble@mogersdrewett.com and let us help you get moving today.