Stamp Duty Land Tax

Head of SMH Residential Mortgages

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One of the key aspects of buying a property that can often be overlooked is the stamp duty land tax (SDLT). At SMH Residential Mortgages, we can explain what SDLT is, how it’s calculated, and some key considerations when it comes to paying SDLT.


What is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is a tax paid by anyone who purchases a property or land in the UK. The amount of SDLT payable is based on the purchase price of the property, with higher-priced properties incurring a higher SDLT bill.


How is SDLT calculated?

SDLT is calculated on a sliding scale, based on the purchase price of the property. There are currently different rates for residential and non-residential properties.


For residential properties, the SDLT rates are:

  • Up to £125,000: 0%
  • £125,001 to £250,000: 2%
  • £250,001 to £925,000: 5%
  • £925,001 to £1.5 million: 10%
  • Above £1.5 million: 12%

For non-residential properties, the SDLT rates are:

  • Up to £150,000: 0%
  • £150,001 to £250,000: 2%
  • Above £250,000: 5%

It’s important to note that these rates apply to the portion of the property price that falls within each band. For example, if you’re purchasing a residential property for £300,000, you’ll pay:

  • 0% on the first £125,000
  • 2% on the next £125,000 (£2,500)
  • 5% on the final £50,000 (£2,500) Total SDLT: £5,000


Key considerations when paying SDLT

When it comes to paying SDLT, there are a few key considerations to keep in mind. Firstly, SDLT must be paid within 14 days of completion, or you risk incurring penalties and interest charges. Secondly, if you’re buying a second property (such as a buy-to-let or holiday home), you’ll be subject to an additional 3% surcharge on top of the standard SDLT rates. Finally, SDLT is just one of the costs associated with buying a property – you’ll also need to budget for legal fees, survey costs, and potentially other expenses.


How can SMH Residential Mortgages help?

At SMH Residential Mortgages, we understand that the world of mortgages and property can be complex and daunting. Our expert advisers can guide you through the process of buying a property, including calculating and paying SDLT. We’ll work with you to understand your unique circumstances and find the right mortgage for your needs.

Get in touch today to see how we can help you on your property journey.