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Stamp and property taxes

England & Northern Ireland

Stamp duty land tax

Stamp duty land tax (SDLT) on residential property is charged at different rates depending on the portion of the purchase price that falls within a certain rate band.

Rates are applied only to the portion of the property's value that exceeds the relevant band threshold.

On 8 July 2020, the chancellor raised the lower threshold at which stamp duty land tax is paid from £125,000 to £500,000.

Most property purchases in England and Northern Ireland below £500,000 will not need to pay stamp duty land tax as long as the deal is completed before 31 March 2021.

First-time-buyers

Up to 7 July 2020, SDLT had been abolished for first-time-buyers who buy homes under £300,000. First-time-buyers who purchased a home worth between £300,000 and £500,000 did not pay stamp duty on the first £300,000. They paid 5% on the price above £300,000 up to £500,000 and the normal rates thereafter.

From 8 July 2020 to 31 March 2021, first-time buyers pay no SDLT on the first £500,000.

Stamp duty land tax on residential properties: based on slices of value

Higher rates of SDLT are charged on purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates are three percentage points above the current SDLT rates.

From 8 July 2020 to 31 March 20221, someone who wishes to buy a second home will not pay stamp duty land tax up to £500,000, but would still be liable to pay the 3% surcharge on the whole purchase price.

Cost (6 April 2020-7 July 2020) Residential * Cost (8 July 2020-31 March 2021) Residential Cost Non-residential or mixed use
Up to £125,000  0% Up to £500,000  0% Up to £150,000   0%
Over £125,000 to £250,000  2% Over £500,000 to £925,000  5% Over £150,000 to £250,000   2%
Over £250,000 to £925,000  5% Over £925,000 to £1.5m  10% Above £250,000   5%
Over £925,000 to £1.5m  10% Above £1.5m  12%    
 Above £1.5m  12%        

SDLT is now payable (and a return must be made) within 14 days of the transaction (previously 30 days).

For purchases by companies and other non-natural persons in excess of £500,000 a rate of 15% applies, subject to certain exclusions.

Scotland

Land and buildings transaction tax (LBTT)

Cost  Residential* Cost  Commercial
Up to £145,000  0% Up to £150,000  0% 
£145,001 to £250,000  2% £150,001 to £250,000  1% 
£250,001 to £325,000  5% Over £250,000  5% 
£325,001 to £750,000  10%    
Over £750,000   12%    

*First-time buyers 0% on the first £175,000.

Wales 

Land transaction tax

Cost  Residential* Cost  Commercial
Up to £180,000  0% Up to £150,000  0% 
£180,001 to £250,000  3.5% £150,001 to £250,000  1% 
£250,001 to £400,000  5% £250,0001 to £1m  5% 
£400,001 to £750,000  7.5%  Over £1m 6%
£750,000 to £1.5m  10%    
Over £1.5m   12%    

* Additional 3% rate applies to certain second properties over £40,000.

Partnerships

Stamp duty applies to transfers of partnership interests, but the amount payable will not exceed the amount that would have been payable on the value of any shares or securities included in the transfer.

SDLT applies to the transfer of an interest in land into or out of a partnership or the transfer of an interest in a partnership (where the partnership property includes an interest in land).

The charge is based on the reported value of the land and the proportionate interest transferred and it applies only to partnerships whose sole or main activity is investing in or dealing in land.

There is no longer an SDLT charge on transfers of partnership interests in other partnerships such as professional partnerships, farming partnerships or partnerships carrying on a trade which is not land-related.

New leases

The rates bands and thresholds for rent paid under a non-residential lease are:

Net present value of rent Rate*
Up to £150,000  0%
Over £150,000 to £5m  1%**
Above £5m  2%***

*In Wales, the 1% band is from £150,000 to £2m and then 2% thereafter.

**On excess over £150,000 up to £5m

***On excess over £5m