Guide to Stamp Duty

Stamp Duty, or Stamp Duty Land Tax (SDLT), is a tax charge relating to UK land and building purchases.  The Government announced in the 2010 Budget that Stamp Duty would be abolished for first time buyers on properties of £250,000 or less for two years - this will be paid for with a 5.00% Stamp Duty rate on properties worth £1million or more (effective from April 2011).

Stamp Duty rates are as follows:

Residential Property	Tax Rate
£0 to £125,000	0%
£125,001 to £250,000	1%*
£250,001 to £500,000	3%
£500,001 or greater	4%

*The rate is 0% for first time buyers from April 2010 for two years.

In Government designated disadvantaged areas the Stamp Duty threshold is £150,000.

Stamp Duty is due 30 days from the date of purchase which needs to be accompanied by the completion of tax form SDLT1. There is an onus on the buyer to ensure this tax is paid to HM Revenue and Customs although normally this is looked after by the buyer’s solicitor or conveyancer.

When the completed tax return is received with payment HM Revenue & Customs will issue a certificate, which must accompany any application for registration to the land registry when applying for registration of title.

For information on how you can lower or legitimately avoid Stamp Duty please see our bookshop recommended title on this subject – How to Avoid Property Tax