Stamp and property taxes

Stamp duty land tax

Stamp duty land tax (SDLT) on residential property is charged at different rates depending on the portion of the purchase price that falls within a certain rate band.

Rates are applied only to the portion of the property's value that exceeds the relevant band threshold. 

First-time-buyers

Stamp duty land tax has been abolished for first-time-buyers who buy homes under £300,000. First-time-buyers who purchase a home worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000. They will pay normal rates on the price above £300,000.

Stamp duty land tax on residential properties

Higher rates of SDLT are charged on purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates are 3 percentage points above the current SDLT rates:

Thresholds Existing SDLT Additional property SDLT rates
£0 - £125,000 0% 3% (from £40,000)
£125,001 - £250,000 2%  5% 
£250,001 - £925,000  5%  8% 
£925,001-£1,500,000  10%  13% 
Over £1,500,000  12%  15% 

The change also provides arrangements where there is a period of overlap or a gap in ownership of a main residence.

Companies purchasing residential property will be subject to the higher rates, including the first purchase of a residential property.

Properties purchased for under £40,000, caravans, mobile homes and houseboats will be excluded from the higher rates.

The land and buildings transaction tax replaces stamp duty in Scotland.

Non-residential and mixed use properties

SDLT is charged on non-residential and mixed use properties at the following rates:

 

Transaction value band Rate
£0-£150,000 0%
£150,001 - £250,000 2%
£250,001+ 5%

 

Land and buildings transaction tax (Scotland)

Cost  Residential  Cost  Non-residential or mixed use
Up to £145,000  0% Up to £150,000  0% 
 £145,001 to £250,000  2% £150,001 to £350,000  3% 
 £250,001 to £325,000  5% Over £350,000  4.5% 
 £325,001 to £750,000  10%    
Over £750,000   12%    

For second and subsequent residential properties the rate charged is 3% over the relevant rates above, starting at £40,000.

Partnerships

Stamp duty applies to transfers of partnership interests, but the amount payable will not exceed the amount that would have been payable on the value of any shares or securities included in the transfer.

SDLT applies to the transfer of an interest in land into or out of a partnership or the transfer of an interest in a partnership (where the partnership property includes an interest in land). The charge is based on the reported value of the land and the proportionate interest transferred and it applies only to partnerships whose sole or main activity is investing in or dealing in land. There is no longer an SDLT charge on transfers of partnership interests in other partnerships such as professional partnerships, farming partnerships or partnerships carrying on a trade which is not land-related.

New leases

The rates bands and thresholds for rent paid under a lease are:

Net present value of rent Rate
£0-£150,000  0%
 £150,001 - £5,000,000  1%
 £5,000,000 +  2%