Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK . The tax is charged at different rates and has different thresholds for different types of property and different values of transaction.

The tax rate and payment threshold can vary according to whether the property is in residential or non-residential use, and whether it is a freehold or leasehold. SDLT relief is available for certain kinds of property or transaction.

Pre-Budget SDLT thresholds:

• 1%: Properties of £125,000 to £250,000; but first-time buyers are exempt until 24 March 2012
• 3%: £250,000 to £500,000 
• 4%: More than £500,000 
• 5%: More than £1m, residential property only. 

2012 Budget Changes 

First Time Buyers relief on stamp duty liability has not been renewed and will cease, as planned, from 24 March 2012. If you’re a first time buyer and are in the process of buying a property you will have to pay SDLT if you have not completed your purchase by tomorrow, 24 March 2012. If you have exchanged contracts only by this date you will still be liable to pay SDLT on completion.

Properties sold for over £2m are now subject to a new 7% stamp duty charge, Chancellor George Osborne confirmed this week. However, the latest statistics from the Land Registry showed that, in November 2011, only 121 homes sold for more than £2m in England and Wales . That accounted for just 0.2% of the 57,967 homes sold that month. Of these 121 homes, 98 were in London , which could be expected.

Properties over £2m bought via a company ‘into a corporate envelope’ would increase to 15% with immediate effect. Until George Osborne's budget crackdown on Wednesday 21 March, anyone buying property held by offshore vehicles could avoid stamp duty by acquiring a company's shares rather than purchasing the property directly. That practice was also seen as beneficial to sellers, since buyers could afford to offer higher prices in the knowledge that no stamp duty was due.

Post-Budget SDLT thresholds:

• 1%: Properties of £125,000 to £250,000
• 3%: £250,000 to £500,000
• 4%: More than £500,000
• 5%: More than £1m
• 7%: More than £2m
• 15%: More than £2m; residential property bought in a company name, by acquiring the shares

It is hoped that the new SDLT rates will effectively prevent stamp duty abuse. The Chancellor commented that "tax evasion and, indeed, aggressive tax avoidance is morally repugnant".


This article is written by Fiona Lumsden. Fiona is a Trainee Solicitor of Lester Dominic Solicitors.