Stamp Duty Land Tax (SDLT): the basics

Stamp Duty Land Tax (SDLT) is generally payable on the purchase or transfer of property or land in the UK where the amount paid is above a certain threshold. In addition most UK land and property transactions must be notified to HM Revenue & Customs (HMRC) on a Stamp Duty Land Tax return within a certain time limit - even if no tax is due.

Various rules apply for working out how much, if any, SDLT is payable. The calculation - which is based on a value called the ‘chargeable consideration’ - can vary depending on whether the land is residential or non-residential, freehold or leasehold, or on other factors such as whether several transactions are linked.

There are also some types of transactions that are exempt from SDLT, or where reliefs can reduce the amount payable.

On this page:

SDLT rates and thresholds
SDLT reliefs and exemptions
What value is SDLT charged on?
Completing an SDLT return

SDLT rates and thresholds

Broadly speaking, SDLT is charged as a percentage of the amount paid for property or land when it is bought or transferred.

Higher percentage SDLT rates apply to higher-value transactions. The amount payable can also vary depending whether the property is being used for residential or non-residential purposes, and whether the property is sold as a freehold or leasehold.

The lowest rate of SDLT payable is 1 per cent of the transaction value. More valuable properties are charged at 3 or 4 per cent.

The threshold at which SDLT becomes payable is currently £175,000 for residential properties and £150,000 for non-residential. If the property value is above this threshold, SDLT is charged on the entire value.

Find out more about SDLT rates and thresholds

To find out about SDLT for more complicated transactions read the later section ‘What value is SDLT charged on?’

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SDLT reliefs and exemptions

Reliefs

Some transactions are entitled to SDLT relief. In these situations you can claim the relief when you complete the SDLT return.

SDLT relief is also available for properties meeting certain strict criteria. For example, new houses that meet 'zero carbon' standards for energy efficiency have an SDLT threshold of £500,000.

Find out more about Zero Carbon Relief and other SDLT reliefs

Exemptions

There are some land and property transactions that don’t need to be notified to HMRC because they are exempt from SDLT. Read our guide below to find out more.

Transactions that don’t require an SDLT return

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What value is SDLT charged on?

SDLT is charged on the total value of what’s known as ‘the chargeable consideration’. The chargeable consideration includes everything of economic value given in exchange for the property - so as well as a payment of money, it can include a release from a debt, the transfer of an existing mortgage, or the provision of other services.

Most residential property purchases

For a straightforward residential property purchase, calculating SDLT is usually easy. The chargeable consideration is simply the purchase price (excluding the value of any extras such as carpets or furniture which are not counted as fixtures and fittings) so you apply the relevant SDLT threshold and rate to the purchase price.

What value is SDLT charged on?

Other types of transaction or new leases with significant rent

Calculating SDLT for other types of transaction or for new leases can be a bit more complicated. In these cases HMRC provides online calculators to help you.

Follow the link below to find out how to calculate SDLT in the following situations:

new leasehold purchases
transferring ownership of land or property
buying or transferring shared ownership property
two or more linked purchases or transfers

Stamp Duty Land Tax for different types of transaction

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Completing an SDLT return

Unless a transaction is exempt from SDLT, the purchaser is responsible for notifying HMRC of the purchase or transfer by completing a Land Transaction Return - commonly referred to as the Stamp Duty Land Tax Return - and for making sure that SDLT is paid on time. In practice, most people employ a solicitor or conveyancer to complete the return for them.

When HMRC receives a valid return, it will issue a Stamp Duty Land Tax Certificate. The transfer of the property cannot be registered at the land registry without this certificate.

All transactions valued at £40,000 or more, must be notified to HMRC within 30 days of the ‘effective date’ of the transaction (for most land and property purchases this is the completion date). If the transaction value is above the payment threshold, you also need to send payment within this time limit.

If the return and payment aren't received within 30 days, the purchaser will incur a penalty charge and will also be charged interest on the overdue payment.

The quickest and easiest way to file a return is online (most SDLT returns are now submitted this way). There are many benefits to using this method. For example, unlike the paper return, you will be presented only with the questions relevant to your situation. You will also receive an automatically generated Land Transaction Certificate that you can send straight off to the Land Registry

Online filing helps make sure that you complete the return and pay the correct tax on time.

Find out more about completing the SDLT return

Find out about Stamp Duty Land Tax filing and payment deadlines

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