You must pay Stamp Duty Land Tax (SDLT) if you buy land or property over a certain price in England and Northern Ireland.

SDLT

SDLT has become increasingly more complex in recent years, especially following temporary changes during the COVID-19 pandemic and as the Government tightens legislation on the purchase of second properties. So, to understand how it might apply to you when purchasing a property, you’ll need to work with experts in this area of tax.

SDLT thresholds have varied in recent years, but once Coronavirus rules on the tax are stepped down, the following base thresholds will apply:

  • £125,000 for residential properties
  • £150,000 for non-residential land and properties

How much SDLT you pay depends on whether the land or property is residential or non-residential. Definitions for residential property are not as clear cut as might be expected, and with more favourable rates in most scenarios being for non-residential, specialist advice should be taken to determine whether a property is residential or not.

Purchasing a second residential property

Individuals purchasing a second residential property must pay an additional 3 per cent surcharge on top of the usual SDLT rates. There are complex rules regarding joint ownership and care must be taken in determining whether this surcharge applies or not.

Purchasing a property for business premises

You may purchase a property, intending for it to be used as your business premises. Business premises will generally be considered as non-residential for the purposes of SDLT; however, it is worth noting that if a business purchases a property that previously had a residential use and it costs more than £500,000, HMRC has the ability to charge a 15% rate of SDLT.

Purchasing an uninhabitable property

In 2019, a landmark case saw clarification on the SDLT policy for uninhabitable properties, establishing that in such cases, the property is non-residential for the purposes of SDLT. This can have significant implications on the amount of SDLT payable, specifically in cases where the residential 3 per cent surcharge has been paid.

Champion can support clients throughout the SDLT process, whether that be through forward planning prior to a transaction or in assessing and recovering overpaid SDLT following a transaction.

SPEAK TO AN EXPERT

David Herd
David Herd
Group Partner
Martin Frain
Martin Frain
Tax Advisory Consultant

WHAT OUR CLIENTS SAY...

“David Herd’s response impressed me from the start as he was extremely knowledgeable in this area; his confidence and optimism of a successful claim ultimately swayed my decision to choose Champion. 

Having already researched the requirements, I collated more than 100 pages of evidence to show HMRC exactly how and why the property was deemed uninhabitable. David meticulously went through this evidence and built a strong case around it before presenting it in a way that would meet HMRC guidelines.”

Vinod Patel, Tax Client

WHAT OUR CLIENTS SAY...

“I had heard via one of our board advisors that uninhabitable homes qualified for a tax rebate. Our business is based on purchasing dilapidated properties through probate or mortgage providers who have repossessed them and developing them into premium properties across London and the South East. We knew that this could be a significant amount, so we assessed the market and spoke to a few well-established tax advisors on this and were introduced to Champion.

“David and the team at Champion filled us with confidence and managed the process end-to-end. The team were highly efficient and kept us informed throughout. They handled every aspect of the process and we were extremely pleased with the net outcome. I would, without question, recommend Champion and David to any developers or property managers with significant portfolio’s.”

Marvin Martin, Director at Martin Developments and Property Services Ltd

For more information about how champion accountants can help,

Contact your local champion office today.