When you buy your property you will pay Stamp Duty Land Tax (SDLT) if your property is valued at £125,000 or more. How much tax you pay depends on whether it is residential, a buy-to-let or second home.
From April 2016 stamp duty for new buy-to-let properties has increased by 3% on the whole purchase value which also applies to people buying a second home. The following table shows how stamp duty is applied in England and Wales:
| Property value | Standard rate | Buy-to-let rate |
|---|---|---|
| Up to £125,000 | 0% | 3% |
| £125,000 – £250,000 | 2% | 5% |
| £250,000 – £925,000 | 5% | 8% |
| £925,000 – £1.5m | 10% | 13% |
| over £1.5m | 12% | 15% |
Stamp duty is paid on the proportions in the above bands. For residential properties up to £125,000 the SDLT is zero but landlords and second homes must pay an additional 3% or £3,750 on this portion.
For a property valued at £300,000 homeowners would pay £5,000 in SDLT whereas a landlord or second home buyer will pay £14,000.
From completion of the property purchase you will have 30 days to pay the stamp duty although your solicitor will usually collect stamp duty tax from you at completion and pay this on your behalf. Always remember it is legally your responsibility to pay the tax so you need to ensure you have paid the correct amount.
