Stamp Duty Land Tax (SDLT)

What is Stamp Duty and When is it payable?

Stamp duty is a tax payable by anyone that buys a property in the UK over a certain value. The rate payable increases for higher value properties. Stamp Duty is paid to your soliciotr who then passes on to the Government. A solicitor is unlikely to complete on a mortgage until your payment of stamp duty has cleared, since it is their repsonsibility to pay this to the Government.

Are Some Areas Exempt From Stamp Duty?

Yes, it's called Disadvantaged Areas Relief. Disadvantaged areas qualify for an exemption from stamp duty if a property is purchased at £150,000 or less. Here is a list of Disadvantaged Areas. Between 3 September 2008 and 31 December 2009 a temporary SDLT threshold of £175,000 was introduced for the purchases of residential property. The higher threshold was not available for mixed use properties (e.g. a property made up of a shop with a flat above). Disadvantage Areas Relief could be used, if available in that area, but would only apply to the residential element of mixed use properties.

Do First Time Buyers Get Extra Additional Help with Stamp Duty?

Yes, they do. First-time buyers of residential property don't need to claim Disadvantaged Areas Relief because they can already claim SDLT relief on purchases of up to £250,000 in any area. However, first-time buyers can't claim this relief if buying a mixed use property (one that is part residential and part business). In this case they should claim Disadvantaged Areas Relief, if available. To qualify for £250,000 SDLT, the effective date of purchase must be between 25 March 2010 and 25 March 2012, the property must be purchased for their own residential use, the buyer must not have previously owned property anywhere in the world (whether on their own or with another person).

£250,000 SDLT is not available for mixed use properties, leasehold properties with a term of less than 21 years, shared ownership schemes, for joint purchases where one person is a first time buyer and the other has owned property before.

How do I Claim Stamp Duty Relief?

Your solicitor will confirm whether or not Disadvantaged Areas Relief is available to you and will help you complete the necessary forms to claim this relief. It is NOT necessary to pay the stamp duty first and then reclaim it later.