What Should Your Stamp Duty Land Tax (SDLT) Payment Be On A Second Property or Inherited Property In The UK?
Stamp Duty Land Tax (SDLT) is a tax paid on property or land purchases over a certain price threshold. The amount of SDLT on a second property is 3 percent more per band than would be paid for a primary residence. For example, if the second home you are buying is worth £2,000,000, the SDLT would be calculated as follows:
In England and Northern Ireland:
3% Up to £250,000 = £7,500
8% Above £250,000 and up to £925,000 = £54,000
13% Above £925,000 and up to £1,500,000 = £74,750
15% Above £1,500,000 = £75,000
Total SDLT due: £211,250
In Wales
Land Transaction Tax (LTT)
Higher Residential Tax (HRT)
4% Up to £180,000 = £7,200
7.5% Above £180,000 and up to £250,000 = £5,250
9% Above £250,000 and up to £400,000 = £13,500
11.5% Above £400,000 and up to £750,000 = £40,250
14% Above £750,000 and up to £1,500,000 = £105,000
16% Above £1,500,000 = £80,000
Total LTT due: £251,200
In Scotland
Land and Buildings Transaction Tax (LBTT)
Additional Dwelling Supplement (ADS)
4% Up to £145,000 = £5,800
6% Above £145,000 and up to £250,000 = £6,300
9% Above £250,000 and up to £325,000 = £6,750
14% Above £325,000 and up to £750,000 = £59,500
16% Above £750,000 = £200,000
Total LBTT due: £278,350
If you are unsure of how much SDLT you should have paid, Stampback can calculate it for you quickly and accurately and advise you how to claim any refund of SDLT that may be due.
Stamp Duty Land Tax (SDLT) When Replacing Your Main Residence
If you are buying a home to replace your main residence, you are exempt from paying Higher Rate Additional Duty (HRAD). If however you purchase your new main residence before you have sold your old one you will incur HRAD but so long as you sell your former home within 3 years you will be able to claim the HRAD portion of the SDLT back. Stampback has handled many successful refund applications based on HRAD claims.
Frequently Asked Questions
Here are 6 frequently asked questions about stamp duty on second homes in the UK:
1. Is Stamp Duty Land Tax (SDLT) calculated differently for companies purchasing further properties as opposed to an Individual buying a second home?
Companies and investors buying additional properties pay the same rate, their purchases would incur HRAD. Purchasers buying a second home before selling their first home will incur HRAD but they can claim that back so long as they sell their main home within 3 years.
2. Will I have to pay additional Stamp Duty Land Tax (SDLT) if I am purchasing a second home as an investment property?
Yes, HRAD SDLT will have to be paid.
3. Can I claim a refund of the Higher Rate Additional Duty (HRAD) portion of my Stamp Duty Land Tax (SDLT) payment?
If you sell or give away your previous main home within 3 years of buying your new home you can apply for a refund of the higher HRAD SDLT rate part of your Stamp Duty payment.
You cannot get a refund if you or your spouse still own any part of your previous home
4. What happens to Stamp Duty Land Tax (SDLT) on every subsequent purchase I make after acquiring my second property, for example if I am acquiring properties to build a portfolio?
On every subsequent property you purchase you will incur Higher Rate Additional Duty (HRAD).
5. What happens if I own multiple properties for investment purposes but I wish to purchase a new main residence?
If you sell you current home and buy your new home simultaneously this is treated as with any typical purchase, i.e. HRAD will not apply. However, if you don’t sell your current home immediately but you sell or give it away within 3 years of buying your new home you can apply for a refund of the HRAD potion of your Stamp Duty Land Rax (SDLT) payment.
6. Do I have to pay Stamp Duty Land Tax (SDLT) if I am a property owner and I inherit another property?
No SDLT is payable on properties inherited in the UK .
Is Stamp Duty Land Tax Due On Inherited Properties In The UK?
One of the most pressing questions for inheritors is whether they will have to pay Stamp Duty Land Tax (SDLT) on their inherited property. The answer is no.
What Happens When You Inherit A Property Together With Others?
Inheriting a property together with others can be a bit more complicated, as there may need to be an agreement drawn up between the co-inheritors on what will happen with the property. In some cases, one inheritor may wish to buy out the other inheritors. The share inherited will not incur Stamp Duty Land Tax but the purchase of shares in the property from other inheritors will almost certainly incur SLDT.
Stampback have acted on a similar case recently and can advise in detail on this subject and obtain refunds where overpayments have been made.