What is UK Stamp Duty (SDLT) for investors & landlords on buy-to-let properties UK Stamp Duty (SDLT) on buy-to-let is a surcharge you pay to the UK government when you purchase a buy-to-let, a home or a second home. What is it? Stamp Duty is a tax on the purchase of land and buildings. This article will overview the UK property tax and what you need to pay to the government. Use our Stamp Duty tax calculator to check how much you need to pay. When and how do I pay the tax? You must pay the Stamp Duty SDLT owed within 14 days of the move-in date. If it is not paid by then, you could risk an automatic £100 fine and having interest added to the amount due. A solicitor or conveyance often deals with tax payments on a purchaser’s behalf, but you are still responsible for ensuring it is done on time. The tax is due whether you buy the home, property or land with a mortgage or cash. HMRC guidelines are essential reading. What are the Stamp Duty rates on buy to let? Anyone buying a second home, holiday home or buy-to-let (any property that isn’t your primary residence) has to pay an extra 3%. The current SDLT rates on the buy-to-let are: £250,001 to £925,000 8% (5% excluding the 3% surcharge) £925,001 to £1,500,000 13%( 10% excluding the 3% surcharge) £1,500,001 and over 15% (12% excluding the 3% surcharge) There are ways to reduce SDLT as a property developer. When is SDLT it not payable? There may be circumstances when SDLT is not payable. These can include: Transfer of property pursues a court order during separation, divorce, or dissolution is generally exempt. If a couple agrees to separate permanently without getting a court order, they will be treated for SDLT purposes as an unmarried couple. Property under the terms of a will may not be subject to Stamp Duty provided no other consideration is given. If you gift your home to anyone else, they won’t have to pay tax on the property’s market value, provided there is no outstanding mortgage. If you take over some or all of an existing mortgage, tax may be payable on the value of the mortgage over the relevant SDLT threshold. You cannot deduct Stamp Duty from income tax, even on buy-to-let properties. You can deduct it from your taxable gains to reduce the Capital Gains Tax you pay when you sell the asset. Tax exemption depends on your situation and your property value. What is the Stamp Duty on second homes? If you buy an additional property, such as a second home or buy-to-let, you will pay an extra 3% on top of the standard rates. This increased rate applies to properties bought for £40,000 or more. It does not apply to caravans, mobile homes or houseboats. You will need to calculate the 3% additional rate surcharge and banded rates. You can do this using the Stamp Duty tax calculator. #StampDuty #StampDuties #SDLT #StampDutyRates #StampDutyUK #WhatIsStampDuty #StampDutyLandTax #BuyToLetStampDuty #StampDutyOnBuyToLet #SDLTBuyToLet FAQ What is SDLT and how does it differ from other stamp duties? SDLT, or SDLT, is a tax on property and land purchases in the UK. Unlike other stamp duties, which might apply to various legal documents, SDLT specifically targets property transactions. The tax rate varies based on several factors like the property price and its intended use, such as residential or buy-to-let. How are stamp duty rates calculated in the UK? Stamp duty rates in the UK are usually calculated based on the purchase price of the property or land. The rates can be progressive, meaning they increase with the value of the property. There are different slabs or bands at which these rates are applied. Special rates may apply for unique cases like buy-to-let properties. I'm looking to invest in a buy-to-let property. How does SDLT on buy-to-let work? SDLT on buy-to-let properties generally incurs an additional 3% charge on top of the standard stamp duty rates. This additional charge applies to the entire price of the property. So, if you're looking into a buy-to-let investment, make sure to account for this additional SDLT cost when planning your finances.