Stamp Duty Land Tax Explained

13 September 2016

Stamp Duty Land Tax is payable if you buy a property or land worth more than the minimum threshold, but it can be confusing to understand when Stamp Duty Land Tax is payable, when it’s not and what rate you have to pay.

As a general rule, you have to pay Stamp Duty Land when you:

  • Buy a freehold property
  • Buy a new or existing leasehold property
  • Buy a property through a shared ownership scheme
  • Transfer land or property in exchange for payment e.g. you buy a share in a house

You have to pay any Stamp Duty Land Tax owed within 30 days of completion of your purchase. If the Stamp Duty Land Tax return and payment is not made within 30 days, you could be charged a penalty and interest.

It’s important to budget effectively when you’re thinking about buying a property, and this includes working out the amount of Stamp Duty Land Tax you will need to pay, and making sure you can afford this additional cost on top of the purchase price of your property.

Your Solicitor or Conveyancer will normally file your Stamp Duty Land Tax return for you on the day of completion, but it is your responsibility to make sure this is done. When you instruct a Conveyancer, always check that the quote for the work includes this part of the transaction. If it doesn’t, you could ask them to include it in your quote (be aware - they may charge you more to complete and submit this form for you) or you could do this yourself.

At Co-op Legal Services we do not charge any additional fees for the submission of your Stamp Duty Land Tax return. The fee you are quoted for the agreed work is the price you pay.

How Much Does Stamp Duty Land Tax Cost?

Stamp Duty Land Tax is calculated as a percentage of the purchase price you pay. The SDLT rates in England and Wales for 2016/17 are:

Property or lease premium or transfer value

SDLT rate

Up to £125,000


The next £125,000 (the portion from £125,001 to £250,000)


The next £675,000 (the portion from £250,001 to £925,000)


The next £575,000 (the portion from £925,001 to £1.5 million)


The remaining amount (the portion above £1.5 million)


It can be a little confusing to calculate your Stamp Duty Land Tax, particularly when the property you’re buying straddles two or more SDLT rates. HM Government have published a useful calculator tool to help you calculate how much Stamp Duty Land Tax you would have to pay, depending on the purchase price. See Calculate Stamp Duty Land Tax (SDLT).

Stamp Duty Rates for Second Home or Property

On 1 April 2016, HM Government introduced a new way to calculate Stamp Duty Land Tax for people who own more than one home. If you own a property and you buy another one before you sell it, or if you own a second property that that isn’t your main residence you will almost certainly have to pay the additional Stamp Duty Land Tax.

The new rate for second properties is 3% above the current scale, see below:


Existing residential 
SDLT rates

Proposed additional
rates for landlords

£0 - £125k



£125,001 - £250k



£250,001 - £925k



£925,001 - £1.5m



£1.5m +



This obviously had a big impact on the buy-to-let property market and there was a sharp increase in properties completing before the stamp duty hike on April fool’s day. 

According to the Council of Mortgage Lenders, in March alone the market saw approximately 160,000 transactions completing. This is compared to their original market estimate of 100,000. This spike was due to the market reacting to the Stamp Duty Land Tax increase, to complete before the April deadline.

“But why does this affect me? I’m buying a house that I will live in as my main residence, and I’ll sell my previous property as soon as I can – surely I won’t need to pay the additional SDLT?”

Unfortunately, if you haven’t sold your main residence by the time you purchase your new property you will need to pay the increased SDLT percentage at the time of completion. Once you have sold your previous property within 18 months, you can then claim back the difference.  

You must make sure that you give your Solicitor or Conveyancer all the information they need about your personal circumstances so they can give you a full breakdown of costs and disbursements, including the right amount of Stamp Duty Land Tax.

This helps you to stay in control of costs and be certain that you can afford to proceed, even with the potential extra money you will have to find to cover the extra stamp duty fees.

If you are considering moving and you have concerns about selling your property to avoid any additional Stamp Duty Land Tax fees, contact us online for a free, no obligation quotation.

We offer a No Sale No Fee Guarantee and offer Conveyancing services right across the UK, including Scotland and Northern Ireland.

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