Published On: Tue, Mar 3rd, 2020

Stamp Duty Land Tax: Current rates which could change in the 2020 budget | Personal Finance | Finance

The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties. However, there are different rules for people buying their first home. A discount will be applied to the tax bill if the purchase was completed on or after 22 November 2017, the purchase price was £500,000 or less and the purchaser(s) is a first time buyer.

Things that are sometimes taken into account include goods, works or services on the property, release from debt or a transfer of debt.

Once the completion of the purchase occurs, the buyer must complete an SDLT return to HMRC and pay the tax within 14 days.

This timing is important as there may be penalties and interest charges on any late payments.

Changes to SDLT will be a key priority for many as we approach the 2020 budget.

In the 2012 budget the SDLT rate was seven percent on residential purchases over £2million. The budget from 2014 detailed that a 15% SDLT rate would be applied to properties valued above £500,000 and in the autumn statement from the same year, George Osborne abolished the residential “slab” system.

In the 2015 Autumn statement an increased SDLT was introduced for second homes and buy-to-let properties. In 2016, the budget removed the “slab” system for commercial or mixed properties and made changes to the rates.

Currently, SDLT is levied on a tapering system, as the government detail below:

Property or lease premium or transfer value                                     SDLT rate
Up to £125,000                                                                              Zero
The next £125,000 (the portion from £125,001 to £250,000)             Two percent
The next £675,000 (the portion from £250,001 to £925,000)             Five percent
The next £575,000 (the portion from £925,001 to £1.5 million)         10 percent
The remaining amount (the portion above £1.5 million)                     12 percent

As mentioned, no official announcements have been made but the government detailed previously that they hope to levy a surcharge of three percent on non residential individuals and companies. This could mean that, for some property buyers, their SDLT charge could be as high as 15 percent.

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