Stamp Duty Land Tax (SDLT): the basics

Stamp Duty Land Tax (SDLT) is generally payable on the purchase or transfer of property or land in the UK where the amount paid is above a certain threshold. In addition most UK land and property transactions must be notified to HM Revenue & Customs on a SDLT return within a certain time limit – even if no tax is due.

Various rules apply for working out how much – if any – SDLT is payable. The calculation – which is based on a value called the ‘chargeable consideration’ – can vary depending on whether the land is residential or non-residential, freehold or leasehold, or on other factors such as whether several transactions are linked.

There are also some types of transactions that are exempt from SDLT, or where reliefs can reduce the amount payable.

SDLT rates and thresholds

Broadly speaking, Stamp Duty Land Tax (SDLT) is charged as a percentage of the amount paid for property or land when it is bought or transferred – unless there is a relief or exemption.

Higher percentage SDLT rates apply to higher-value transactions. The amount payable can also vary depending on whether the property is being used for residential or non-residential purposes, and whether the property is sold as a freehold or leasehold.

Stamp Duty Land Tax rates and thresholds

To find out about SDLT for more complicated transactions, see the page in this guide on what value is SDLT charged on?

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SDLT reliefs and exemptions

Some transactions are entitled to Stamp Duty Land Tax (SDLT) relief. In these situations, you can claim the relief when you complete the SDLT return.

SDLT relief is also available for properties meeting certain strict criteria. For example, new houses that meet ‘zero carbon’ standards for energy efficiency have an SDLT threshold of £500,000.

Exemptions

There are some land and property transactions that don’t need to be notified to HM Revenues & Customs (HMRC) because they are exempt from SDLT.

Transactions that don’t require an SDLT return

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What value is SDLT charged on?

Stamp Duty Land Tax (SDLT) is charged on the total value of what’s known as ‘the chargeable consideration’. The chargeable consideration includes everything of economic value given in exchange for the property – so as well as a payment of money, it can include a release from a debt, the transfer of an existing mortgage, or the provision of other services.

Most residential property purchases

For a straightforward residential property purchase, calculating SDLT is usually easy. The chargeable consideration is simply the purchase price – excluding the value of any extras such as carpets or furniture which are not counted as fixtures and fittings – so you apply the relevant SDLT threshold and rate to the purchase price.

What value is SDLT charged on?

Other types of transaction or new leases with significant rent

Calculating SDLT for other types of transaction – or for new leases – can be a bit more complicated. In these cases, HM Revenue & Customs provides online calculators to help you.

Follow the link to our related section below to find out how to calculate SDLT in the following situations:

• new leasehold purchases
• transferring ownership of land or property
• buying or transferring shared ownership property
• two or more linked purchases or transfers

Stamp Duty Land Tax

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Completing a Stamp Duty Land Tax return

Unless a transaction is exempt from Stamp Duty Land Tax (SDLT), the purchaser is responsible for notifying HM Revenue & Customs (HMRC) of the purchase or transfer by completing a Land Transaction Return – commonly referred to as the SDLT return – and for making sure that SDLT is paid on time. In practice, most people employ a solicitor – or conveyancer – to complete the return for them.

When HMRC receives a valid return, it will issue an SDLT Certificate. The transfer of the property cannot be registered at the Land Registry without this certificate.

All transactions valued at £40,000 or more must be notified to HMRC within 30 days of the ‘effective date’ of the transaction – for most land and property purchases, this is the completion date. If the transaction value is above the payment threshold, you also need to send payment within this time limit.

If the return and payment aren’t received within 30 days, the purchaser will incur a penalty charge and will also be charged interest on the overdue payment.

The quickest and easiest way to file a return is online – most SDLT returns are now submitted this way. There are many benefits to using this method. For example, unlike the paper return, you will be presented only with the questions relevant to your situation. You will also receive an automatically generated Land Transaction Certificate that you can send straight off to the Land Registry.

Online filing helps make sure that you complete the return and pay the correct tax on time.

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