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Stamp Duty Land Tax changes

View profile for Sian Taylor
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As of 1 March 2019, the time limit for submitting a Stamp Duty Land Tax return, or SDLT return, has been changed. Previously, buyers had to submit their SDLT return and pay their tax liability to HMRC within 30 days of the “effective date” (which in most cases is completion). This 30 day period has been reduced to 14 days. This gives you less than half the time you previously had.

What is Stamp Duty Land Tax?

SDLT is a tax you have to pay if you buy a property, take a lease or buy land over the SDLT threshold.

The SDLT thresholds are different for residential and non-residential properties. Currently, the SDLT threshold is £125,000 for residential properties and £150,000 for non-residential properties.

How much Stamp Duty Land Tax would I pay?

Generally, the amount of SDLT you pay is dependent on the price of the property.  However, SDLT can also be charged on other types of “consideration” that you give for the property, which can include where you take on a debt (including any outstanding mortgage).

How much SDLT you pay will differ depending on whether the land or property is residential, non-residential, mixed-use (for example a shop with a residential flat above) or whether you benefit from a relief.

There are various reliefs and exemptions that could apply to your transaction. For example, property left to you in a will is exempt from the requirement to submit a SDLT return and make payment.

First-time buyers can also claim a relief, so they do not have to pay SDLT on the first £300,000. If you are buying your first home and the purchase price is under £300,000 then you would be eligible for the relief and would not be liable to pay SLDT.       

Stamp Duty Land Tax may also differ if you own more than one property, for example, if you already own your own home and decide to purchase a flat to rent. 

Therefore, if you are purchasing property, it is likely that SDLT will be payable.

The change means that you will have less time following completion to ensure that the return and the tax are paid. If you pay late, you will be charged a fixed £100 penalty if the return is up to 3 months late. This increases to £200 if the return is more than three months late. You will also be liable to pay interest.

Our property lawyers keep track of deadlines, and draft, submit and forward your payment of the tax due to HMRC on your behalf.

If you are purchasing property or taking a lease, please contact one of our commercial property solicitors. I am based in our Colchester office and can be contacted on 01206 217337 or Alternatively, you can complete our online enquiry form.