Stamp duty is usually paid on the increased portions of a residential property priced above £125,000. There are different rules in place if the purchaser is buying a first home and the price is £500,000 or less.
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The rules can also change depending on where the property is within the UK.
People purchasing an additional residential property worth £40,000 or more will have to pay an additional stamp duty, even if the property already owned is abroad.
The SDLT return must be sent to HMRC and the tax must be paid within 14 days, if it is late there may be penalties.
Evidently, the rules around SDLT are complicated but thankfully, the government provides a free-to-use calculator on their website which will help people work out exactly what is owed.
The calculator will work out the SDLT payable for most transactions according to the government’s website.
The tool can be used for property purchases that are:
- For first-time buyers
- Replacing main residence
- Additional property
- Residential or non-residential
- Freehold or leasehold
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When using the tool, users will be asked if their transaction is for a freehold or leasehold property.
Once an option is selected, it will ask if the transaction is for a residential or non-residential property.
Following this, the user will be asked for the completion date, if they’re completing the purchase as an individual and the actual price paid (the chargeable consideration).
The user will be allowed to review everything that they’ve inputted and when they’re happy, they can move onto the final screen where the total SDLT due will be detailed.
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The calculator is easy to use but it is not the only option for people unsure of what they’ll owe.
The Money Advice Service also offers a free-to-use stamp duty calculator which has slightly different methods of interaction.
Their tool simply asks if the user is buying their “next” home, a first home or an additional property.
The only other information needed is the property price.
Once this information is entered, the calculator will just show the stamp duty to pay along with an effective tax rate.
There is also a sliding scale on this page which will allow the user to lower or raise the property price.
The corresponding stamp duty bill will lower or raise with this in real time.
From here, the user will be presented with other options they can use, such as a mortgage calculator and an affordability calculator.
The amount of SDLT paid will be dependent on the rate that the purchaser falls into.
Anyone purchasing a property for less than £125,000 will not pay any stamp duty but the tax levied will rise on a tapered scale as detailed below:
- £125,001 to £250,000 – two percent
- £250,001 to £925,000 – five percent
- £925,001 to £1.5million – 10 percent
- Over £1.5million – 12 percent
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