Stamp Duty Land Tax on
residential transactions where chargeable consideration exceeds £1 million
On this page:
Stamp Duty Land Tax when the 5 per cent rate applies
– an overview
- Finance Act 2010 introduced a new 5 per cent rate of Stamp Duty
Land Tax for residential property transactions where the chargeable
consideration exceeds £1 million.
- The new rate applies to transactions where the effective date is
on or after 6 April 2011.
- The existing 4 per cent rate will still apply to residential property
transactions where the consideration is more than £500,000 and up
to £1 million.
- Transitional arrangements apply to transactions where a contract
was entered into before 25 March 2010 (Budget day) but is not completed
before 6 April 2011. In most such cases the new rate will not apply.
- Non-residential and mixed use transactions are not affected.
- HM Revenue & Customs online calculators have been amended to
reflect the new rate.
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What is treated as residential property
Residential property is property which is used, suitable for use or
being adapted for use as a dwelling, together with certain land and
buildings associated with the dwelling. There are detailed rules determining
whether certain types of institutional accommodation count as a dwelling
- follow the link below to read information in the Stamp Duty Land Tax
manual.
Read
about residential property in the Stamp Duty Land Tax manual
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Stamp Duty Land Tax transactions when the 5 per cent
rate applies
The 5 per cent rate applies to the following transactions:
- transactions which consist wholly of residential property and where
the chargeable consideration exceeds £1 million
- linked transactions which consist wholly of residential property
where the aggregate chargeable consideration exceeds £1 million
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Stamp Duty Land Tax transactions when the 5 per cent
rate does not apply
The following transactions are treated as non-residential for Stamp
Duty Land Tax purposes so the 5 per cent rate does not apply:
- transactions which consist partly of residential and partly of
non-residential property and where the chargeable consideration exceeds
£1 million
- linked transactions which consist partly of residential and partly
of non-residential property where the aggregate chargeable consideration
exceeds £1 million
- single transactions comprising of six or more separate dwellings
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Contracts before 25 March 2010
Where a contract was entered into before 25 March 2010, the new rate
will not apply if the contract is substantially performed before 6 April
2011, or it is completed after that date and, on or after 25 March 2010:
- the contract was not varied or the rights under it assigned • there
was no exercise of any option, right of pre-emption or similar right
- there was no assignment, sub-sale or other transaction involving
all or part of the subject-matter of the contract
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