Residential Property Stamp Duty Rates
A purchaser pays Stamp Duty Land Tax (SDLT) on all residential purchases above £125,000. Property prices below £125,000 pay zero rate SDLT. Note that this only applies to residential property purchasers. The rates of stamp duty are as follows
£125,000 or below = 0%
£125,000.01 – £250,000 = 2%
£250,000.01 = £925,000 = 5%
£925,000.01 – £1,500,000 = 10%
Above £1,500,000.01 = 12%
For example, a property is purchased for £300,000.
First £125,000 = £0
2% between £125,000 and £250,000 = £2,500
5% between £250,000 and £300,000 = £2,500
Total stamp duty = £5,000.
Stamp Duty Rates for Buy to let Landlords
Buy to let landlords are set to be hit with an extra 3% stamp duty on the above rates from April 2016. In the above example of a £300,000 property purchase, stamp duty on the first £125,000 will be at 3% = £3,750. The next £125,000 will have a rate of 5% = £6,250. The final £50,000 will be taxed at 8% = £4,000. Total stamp duty tax = £14,000. That is a £9,000 increase.
It is not just landlords that will be hit but anyone owning a second home. This could be parents buying a property for their children or a couple setting up home where one is already a homeowner.
The higher rates will only apply to additional properties purchased in England, Wales and Northern Ireland on or after April 1 2016. Transactions below £40,000 are exempt as well as transactions involving houseboats and caravans.
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