Stamp Duty is the tax charged on legal documents usually concerned with the transfer of assets of property. Land transactions are subject to Stamp Duty Land Tax (SDLT).
What are the different rules around the United Kingdom?
England and Northern Ireland
Stamp Duty Land Tax (SDLT) is payable if you buy a property or land in England and Northern Ireland above a certain threshold.
The 2018/19 SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.
Land and Building Transaction Tax (LBTT) is payable if you buy a property or land in Scotland aboe a certain threshold.
The 2018/19 LBTT threshold is £145,000 for residential propertes and £150,000 for non- residential land and properties.
Land Transaction Tax (LTT) is payable if you buy a property or land in Wales above a certain threshold.
The 2018/19 LTT threshold is £180,000 for residential properties and £150,000 for non-residential land and properties.
First time buyers
There are different rules if you're buying your first home. You get a discount (relief) that means in many instances you pay less or nothing at all.
Individuals and companies need to pay a higher rate of land tax when buying an additional residential property in England, Wales or Northern Ireland.
The higher rate applies even if the other residential properties are outside of those in the UK.
Invest in commercial property and save the 3% additional SDLT charge
If you already hold a good portfolio of residential buy-to-let properties, consider diversifying into commercial property. It is a way of spreading your investment risk, and avoiding the need to pay the 3% additional SDLT charge imposed on purchasers of additional residential properties.
HMRC and successive Chancellors have been cracking down on SDLT avoidance schemes. While there are still some legitimate ways to mitigate your exposure to SDLT, it is an area regarding which you really need to seek advice from appropriately qualified advisers. We're here to guide you through the maze.