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What is Stamp duty land tax? Calculator and rates for 2023

Co to jest Stamp Duty land tax?

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If you are planning to buy a property in the UK or are going through this process, you will certainly have come across Stamp duty land tax. In this article you will find not only an explanation of this term, but also a table with the current rates and a calculator to save you some time when counting 🙂

What is stamp duty land tax? Calculator, rates
Stamp duty land tax- all the most important information about it

Stamp duty land tax – definition

Let’s start with some basic information about stamp duty.

Stamp duty land tax (SDLT) is a tax on the purchase of property (house, flat, land) in England and Northern Ireland. As a general rule, the tax liability lies with the purchaser and the time to pay it is 14 days from the date of purchase.

Source: GOV.UK

However, it is worth noting that stamp duty will not have to be paid in every situation. There are several exceptions to this obligation, which we will go into later in this article.

In the definition we gave above, there was a mention of England and Northern Ireland. Does this mean that buying a house in Scotland does not involve paying tax? Unfortunately, no. There are also transaction taxes in both Wales and Scotland, but they are named differently and their rates are not the same as in England. The Welsh equivalent of stamp duty is called land transaction tax, while the Scottish equivalent is called land and buildings transaction tax.

Stamp duty land tax- rates in 2023

On 23 September 2022, changes to stamp duty land tax occurred and, in principle, most buyers will benefit from them. Here is a comparison of the current and previous rates:

Value of propertyStamp duty land tax rate before 23 September 2022Stamp duty land tax rate after 23 September 2022
£0-125,0000%0%
part between £125,001-250,0002%0%
part between £250,001-925,0005%5%
part between £925,001-1,500,0010%10%
part above £1,500,00112%12%
Stamp duty land tax rate table

What is the point of “parts”? As a general rule, stamp duty land tax is supposed to affect the wealthiest people the most. If you buy a property for, say, £100,000, the tax calculation is very simple – the amount due is simply 0. It will be slightly different if you buy a property for, say, £900,000. Just for the sake of formality, we would also add that our calculations apply to people without first time buyer status. The tax payable is:

According to the rate valid until September 23:

  • Tax for the part £0-125,000: £0
  • Tax per part £125,000-250,000: £2,500
  • Tax per part £250,001-900,000: £32,500

Total amount payable: £35,000

The changes introduced in the autumn do not concern the way the tax is calculated. The only thing that differs is the tax thresholds. In effect:

According to the rate valid after 23 September:

  • Tax for the part £0-125,000: £0
  • Tax per part £125,000-250,000: £0
  • Tax per part £250,001-900,000: £32,500

Total amount payable: £32,500

The above sums are impressive, aren’t they? Fortunately, buying a property for £900,000 doesn’t happen very often. You can find current property prices in the UK in our article on the subject.

You can also find current stamp duty rates on the UK Parliament website.

Stamp duty land tax and first time buyer status

A discount has been introduced for those buying their first property (first time buyers). This is not new, but September’s changes clearly raised the threshold – currently, that is, in February 2023, it is £425,000. However, it is worth remembering that this discount only applies if the value of the property does not exceed £625,000. In practice, this means that if you do not own any property (not just in the UK), you are unlikely to pay a pound of tax.

Unfortunately, there is bad news for those buying a second or subsequent property – if you buy more than £40,000, you will be charged 3% more tax than standard. Source: Moneyhelper

Those who do not have UK resident status will also pay a higher rate of stamp duty land tax. In this case, the threshold amount is also £40,000, but the increase is 2 instead of 3%. Source: Moneyhelper

Stamp duty for properties under leashold

Sometimes the question of tax on leasehold properties comes up. Unfortunately, stamp duty must also be paid in this situation, and its rates are exactly the same as for a freehold purchase. The form of buying also changes nothing – whether you pay cash or take out a loan, you have to pay stamp duty land tax.

Tax calculator

As you can see, calculating the amount due can be a little complicated. That is why we have prepared a calculator for you that will make the whole process much easier.


Stamp Duty Land Tax Calculator (England and Northern Ireland)



£
Enter an amount higher than £0.
Choose one option.

Results

Amount of stamp duty tax:
Overall rate:

How was the stamp duty tax calculated?

Tax thresholdsPercentage rate %Amount subject to taxTax
0000

Please note: the above calculator is for illustrative purposes only and the information provided is not legally binding. The rates were updated in February 2023.

Other stamp duty calculators

You will also find other calculators on the internet. We can confidently suggest two options:

When and how do I pay stamp duty land tax?

The duty to pay stamp duty occurs on the date of completion of the transaction, that is, completion. According to the regulations, the purchaser has equally 2 weeks to submit the SDLT return to HMRC. In practice, the new owner very rarely pays the tax himself - this is done by a solicitor. It is up to him/her to both file the return and pay the fee, which of course has to be paid back. Usually, the settlement with the solicitor takes place on the day of completion and it is then that the buyer pays the tax.

Oczywiście nic nie stoi na przeszkodzie, by samodzielnie złożyć zeznanie i zapłacić podatek. Kompleksowy poradnik znajduje się na stronie Stamp Duty Land Tax online and paper returns.

Of course, nothing prevents you from filing the return and paying the tax yourself. A comprehensive guide can be found on the Stamp Duty Land Tax online and paper returns page.

Summary

The information we have gathered should be comprehensive, but if you have any questions, we are of course here to help. If you are planning to buy a property in the UK, we encourage you to get in touch. Our advisers will help you at every stage of the transaction and the whole process will go smoothly and in a pleasant atmosphere 🙂

By the way, we encourage you to read other articles on our blog. Here are a few posts which you may find useful:

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Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

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Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

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