Stamp Duty Land Tax – 3% Surcharge for Residential Properties

Stamp Duty Land Tax

| What is Stamp Duty Land Tax

Stamp Duty Land Tax, formerly known as Stamp Duty, is tax that is payable to the Government on the purchase of property or the grant of a lease in the UK. It is charged at different rates depending on the type of property and value of the transaction.

| Stamp Duty Land Tax rates for residential properties

Since 2014, Stamp Duty Land Tax on residential property transactions has been charged using a separate rate of tax on each portion of the purchase price. The current rates are as follows:

Purchase Price Stamp Duty Land Tax Rate
Up to £125,000 0%
Over £125,000 and up to £250,000 2%
Over £250,000 and up to £925,000 5%
Over £925,00 and up to £1,500,000 10%
Over £1,500 12%

For example, you purchase a property for £275,000 you will pay Stamp Duty Land Tax of £3,750 (0% on £125,000, 2% on £125,000 and 5% on £25,000).

| What is the 3% Surcharge?

In 2016, the 3% surcharge was introduced if you are buying an additional property, for example a second home, holiday home or buy to let property. The purchase needs to be worth £40,000 or more. The 3% surcharge will be added on top of the Stamp Duty Land Tax Rate, which is also referred to as the higher rate.  The higher rates are as follows:

Purchase Price Higher Stamp Duty Land Tax Rate
Up to £125,000 3%
Over £125,000 and up to £250,000 5%
Over £250,000 and up to £925,000 8%
Over £925,00 and up to £1,500,000 13%
Over £1,500 15%

For example, you purchase a property for £275,000 you will pay Stamp Duty Land Tax of £12,000 (3% on £125,000, 5% on £125,000 and 8% on £25,000).

You can claim a refund of this additional Stamp Duty Land Tax charge if the second property is intended as a replacement of the main residence and the main residence is sold within 36 months of the purchase of the second property.

From April 2021, a 2% surcharge was introduced for non-UK residents which is additional to the residential rates of Stamp Duty Land Tax including the higher rates.

| When is Stamp Duty Land Tax Paid?

Stamp Duty Land Tax is payable to Her Majesty’s Revenue & Customs (HMRC) within 14 days of completion of the purchase. Non-payment or evasion of tax gives rise to fines and penalties.

If you have any questions in relation to Stamp Duty Land Tax, our residential property team can help, contact us today on 0800 988 7756 or an instant quote by using our free conveyancing calculator today.

Recently Added

Renters (Reform) Bill: Can the Courts cope?

Renters (Reform) Bill: Can the Courts cope?

The government has pledged to bring in the Renters (Reform) Bill and end “no fault evictions” before the next general election. For more information on this, read our previous blogs on the topic. In fact, it looks likely to be back in the House of Commons next week. ...

We speak your language

We speak your language

At Levi Solicitors LLP, understanding your needs and queries is paramount. We are proud that we can offer staff who can speak many different languages. So, if you’re not comfortable speaking in English, we may be able to offer you a solicitor who can speak to you in...

What our clients say