When purchasing a property (residential, commercial or mixed use) or land in England you must pay Stamp Duty Land Tax (SDLT) to the government if the purchase is over £125,000 for residential properties or £150,000 for non-residential land and properties.

Is it as simple as that? 

Straight answer is no! SDLT is complicated, often administered incorrectly or not always fully understood. Often it is calculated by a professional at face value, but commonly there is opportunity in the detail.  This can ultimately mean you may pay more than necessary which could make a property or land unaffordable and out of reach.

For non-UK residents there is a 2% surcharge when purchasing a residential property, which started on the 1st April 2021. The conditions are complicated and we would recommend you get advice before purchasing. 

There is also a 3% surcharge if you purchase additional residential homes (such as Buy to Lets or a holiday home for example). Again this is complex and there are various types of properties that are exempt so we would recommend getting advice before making your purchase.

Are there any exemptions or reliefs available?

Definitely and they mean you don’t have to pay as much or in some cases at all.

Some examples are: 

  1. Property transactions with additional dwellings, buildings or land within the grounds or part of the same transaction. 
  2. Properties with separate Annexes 
  3. Properties that are run down or with issues that make them uninhabitable initially. This could be problems such as damp, asbestos or just very run down 
  4. Property transferred at nil consideration (with some exceptions) 
  5. Transfers because of divorce 
  6. Property transferred via a will 
  7. A property business that is incorporated 

There are many more and you can appreciate that the legislation is complex and it is often not clear if a relief can be applied or not. The devil (or opportunity) is in the detail which is often why these are not considered.

Case Studies

To give you an idea…

An offer was made to acquire a house for £2.2 million. The property was originally built in the 16th century and is a beautiful house surrounded by unspoilt countryside. The purchase included:

  • Main house, consisting of four bedrooms,
  • Guest cottage, consisting of one bedroom,
  • Outbuildings, consisting of former mills, stables, piggery, hay barn, garage and
    workshop,
  • 44.6 acres of land, including a woodland, paddock and meadow

SDLT was quoted as £229,000 by solicitors acting for the purchaser.

On review, we were able to identify that SDLT could be reduced to £95,000. Saving of £134,000

A run-down bungalow in a popular South Hams town was on the market for £625,000. The plot measured approximately 1.24 acres and adjoins mature woodland to two sides.

Our client planned to knock down the bungalow and build a new dwelling in its place. The purchase price was £625,000. SDLT was quoted at £40,000 by the acting solicitor.

We were able to make a case to HMRC that the property was uninhabitable and SDLT could be reduced to £20,000.

Saving of £20,000

A client bought a new property for £850k and paid SDLT of around £58k as per her solicitors instruction as she owned another property.

Her solicitor was not aware what this other property was used for and after a brief chat we identified that it was not deemed to be a qualifying dwelling for the SDLT additional charge. It was used for residential care for adults.

SDLT of £25.5k was reclaimed from HMRC.

Saving of £25,500