Stamp Duty Land Tax
The Government has reduced the Stamp Duty Land Tax threshold from £500,000 to £250,000 in England and Northern Ireland from 1 July 2021 to 30 September 2021. The threshold will then change to £125,000 on 1 October 2021.
In Scotland and Wales, stamp duty rates and bands have been temporarily changed, but are different to England. Find out how this affect Scotland and Wales.
Read our Stamp Duty Land Tax – what you need to know page to help your application progress quicker.
When purchasing a Buy to Let property in England and Northern Ireland, your client will have to pay Stamp Duty Land Tax (SDLT). They'll need to pay in increasing portions of the property price. If they own or will own two or more properties, the higher rate of SDLT applies, however there are some scenarios where they may or may not have to pay, which are detailed below*.
Here are the rates when purchasing a buy to let property between 1 July 2021 and 30 September 2021:
|Property value||Standard SDLT rates||Higher SDLT rates for additional properties|
|Up to £250,000 (excluding purchases below £40,000)||0%||3%|
|£250,001 to £925,000||5%||8%|
|£925,001 to £1.5 million||10%||13%|
|Over £1.5 million||12%||15%|
If your client buys a property priced at £300,000 and the higher rates are applicable, here is the stamp duty land tax payable. You can also compare to see what the total would be after the Government changes from 1 October 2021.
|Total portion amount
(from 1 July 2021 to 30 September 2021)
|Total portion amount
(from 1 October 2021)
|£0 to £125,000 portion||£3,750||£3,750|
|£125,001 to £250,000 portion||£3,750||£6,250|
|£250,001 to £300,000 portion||£4,000||£4,000|
|Total stamp duty land tax||£11,500||£14,000|
What does this mean for my client?
The table below shows how the changes could impact an additional purchase in England and Northern Ireland, depending on the purchase price:
|Purchase price||SDLT from 1 October 2021||SDLT between 1 July 2021 and 30 September 2021|
Stamp Duty calculator
To calculate the SDLT for your clients property, use the stamp duty calculator on the Money Advice Service website.
Does this affect Scotland and Wales?
In Scotland, the Land and Buildings Transaction Tax (LBTT) replaced SDLT in 2015. LBTT rates also have the 3% surcharge on additional residential properties. For more information visit www.revenue.scot.
In Wales, Land Transaction Tax (LTT) was introduced from 1 April 2018. LTT rates also have the 3% surcharge on additional residential properties. For more information visit https://beta.gov.wales/welsh-revenue-authority.
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*Please note the scenarios are not exhaustive. If you're unsure how this may impact you and your client and need more information on your personal scenario, please contact an Independent Tax Adviser at unbiased.co.uk.