Stamp Duty Land Tax (SDLT) is a mandatory tax on all property purchases valued over £40,000, with the charges working on a tiered system. The new taxation levels were introduced in April 2016 and remain in force.
Stamp Duty Land Tax (SDLT) is a tax on all land transactions in the UK, excluding Scotland, introduced in 2003 and is payable to HM Revenue and Customs. For typical transactions of a residential property there is little change from the older stamp duty laws. The amount of SDLT you have to pay is dependent on the value of the property you are buying, and buy-to-let purchases are not exempt from this.
Properties up to the value of £40,000 will not face any SDLT charges, but any property exceeding this amount must pay the following amount, which is calculated on a tiered system based on the total price:
· Up to £125,000 = 3%
· £125,0001 - £250,00 = 5%
· £250,001 - £925,000 = 8%
· £925,001 - £1.5m = 13%
· £1.5m+ = 15%
To illustrate the new changes, a property valued at £250,000 would pay 3% on the first £125,000 of the property’s value (a base addition of £3,750 applicable to all properties above £40,000) and then a further 5% (£6,250) on the remaining property value of £125,000. This means that, when calculated, the Stamp Duty on a property of this value would work out at exactly £10,000.