Stamp Duty Rates When Buying Buy To Let Property Through A UK Limited Company

Calculate Stamp Duty (SDLT) for limited company owners of business property

Stamp Duty Land Tax (SDLT) is charged on Limited Companies when you make purchases of UK residential buy to let property through a company.

Use our SDLT calculator to calculate stamp duty for limited companies to check how much you need to pay.

Calculating SDLT is a complex area that UK landlords must navigate carefully when buying buy-to-lets.

SDLT is charged 15% on residential houses costing £500,000 and over.

HMRC defines these non-natural persons as companies, partnerships and collective investment schemes.

The 15% SDLT rate does not apply to settlement trustees.

This SDLT rate is also exempt for those who purchase houses for a property rental business, developers and traders, houses occupied by employees, a housing co-operative, farmhouses, and financial institutions buying in the course of lending.

These exclusions are subject to specific conditions.

There is a 3% surcharge on residential properties bought by limited companies. This is a useful guide for landlords buying residential houses.

What are the basics of SDLT?

As property accountants serving thousands of UK landlords who purchase buy-to-let properties, we know that SDLT can be an uncertain topic.

SDLT is a tax on purchases or acquisitions over a certain price in England and Northern Ireland.

SDLT tax works differently if purchased in Wales or Scotland.

Where a second property costs more than £40,000, the SDLT rate will be 3% above the standard rates.

Non-resident companies or controlled by non-residents pay a 2% surcharge on all properties over the £40,000 purchase threshold.

If the company is purchasing an additional house, higher rates of SDLT apply.

Landlords will pay an additional 3% above the standard SDLT rates where they already own a home.

Stamp Duty does not apply to purchases under £40,000 or caravans, motorhomes and houseboats.

A company will pay the 3% surcharge on any residential property over £40,000.

This applies irrespective of whether or not it is the first property purchased by the company.

The 3% rate does not apply to non-residential properties for companies.

Do companies pay a surcharge on BTL properties?

The 3% SDLT surcharge was announced in 2015 and implemented in April 2016.

The 3% automatically applies to any limited company purchasing a house.

Will a company pay less Stamp Duty?

In April 2020, if you owned a buy-to-let in your personal capacity, you would no longer be able to offset the mortgage interest payments as an expense against rental income in your self-assessment tax return.

This is not the same for limited companies.

Mortgage interest payments remain an allowable expense to reduce profits and corporation tax.

However, a company will still be liable to pay the 3% SDLT surcharge where a property costs over £40,000.

You will need to pay conveyancing and also potentially mortgage transfer costs.

A company pays the same Stamp Duty rate as an individual for non-residential property.

Here are some ways to reduce SDLT as a developer.

Can you claim back SDLT?

You can only claim back Stamp Duty if you are eligible for a refund.

You may be able to claim an SDLT refund if you purchased a new main residence without selling your previous residence but then sold that previous residence within three years.