Stamp Duty Land Tax (SDLT) is payable if you buy a residential or non-residential property in England and Northern Ireland over a certain price. You should be aware that there are different rates for residential and non-residential properties.

What if I have a non-residential property?

If you have a non-residential property, which is used for commercial use such as a shop or an office, then you may still have to pay SDLT. The non-residential rates of SDLT will also apply when six or more residential properties are purchased in a single transaction.

Mixed use properties

The non-residential rates of SDLT also apply to mixed use properties, if they have been used for both residential and non-residential elements. An example of a multiuse property is a house which has been split into a takeaway with a flat above it.

Rates

The rates of SDLT for non-residential properties are:

  • Up to £150,000 – no SDLT rate
  • The next £100,000 (£150,001 to £250,000) – 2% SDLT rate
  • If the property is in excess over £250,000 – 5% SDLT rate

For example, if Gemma bought a commercial property for £320,000. The SDLT rate payable would be £5,500.

New leasehold sales and transfers

If you purchase a new non-residential property or mixed use leasehold property, then you will have to pay SDLT on the purchase price, and the rent payable under the lease. Both elements are calculated separately and added together.

How do I work out the rent payable under the lease?

You will have to pay SDLT if the rent payable is:

  • £0 to £150,000 – no SDLT rate
  • £150,001 to £5,000,000 – 1% SDLT rate
  • Excess over £5,000,000 – 2% SDLT rate

There is no SDLT is payable on the rent if the net present value is less than £150,000.

Do I have to pay stamp duty tax?

You should be aware that you will only have to pay stamp duty land tax on a lease where an existing lease is assigned.

SDLT calculator

There is a calculator that is available by HMRC, which is published on the Gov.uk website that can be used to work out the SDLT payable on a commercial transaction. You can use the calculator here – www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro.

What if I have a property in Scotland and Wales?

You should also be aware that stamp duty land tax is transferred from land and building transaction tax (LBTT) applying in Scotland and land transaction tax (LTT) applying in wales.

The rates of LBTT payable on the purchase of non-residential properties in Scotland can be found at www.revenue.scot/land-buildings-transaction-tax/guidance/calculating-tax-rates-and-bands.

The rates of LTT payable on the purchase of non-residential properties in Wales can be found at https://gov.wales/land-transaction-tax-rates-and-bands.

Further Actions

Make sure that you utilise HMRC’s resources to work out how much SDLT is payable to avoid any fines.

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