Your Guide To Stamp Duty and Land Registry

When buying a house there are a number of additional costs to consider and budget for. Chief among these are Stamp Duty and the charges levied by the Land Registry.

What Is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tariff paid on all residential property or land purchases in England, Wales and Northern Ireland costing over £125,000. It is paid to HM Revenue & Customs, with the amount dependent upon the Stamp Duty band your prospective property falls into.

The freehold Stamp Duty bands are as follows:

Price Band0% of Purchase Price
Up to £125,0000%
£125,001 to £250,0002%
£250,001 to £925,0005%
£925,001 to £1.5million10%
Over £1.5million12%

For Example:

The payment of Stamp Duty works in the same way as income tax bands, in that you pay progressively more, the higher the value of the house.

For example, a property costing £350,000 would work out as follows:

Price BandAmount To Pay
0% on the first £125,000£0
2% on the next £125,000 (£125,001 – £250,000)£2,500
5% on the last £100,000 (£250,001 – £285,000)£5,000
Total stamp duty to pay:£7,500

If you are buying a leasehold property, Stamp Duty is still payable. It is worked out using the same Stamp Duty bands and rates as those applied to a freehold transaction, but against the purchase price of the lease. There is an additional 1% to pay on any portion of rent – calculated over the lifetime of the lease – that exceeds £125,000

If you purchase a property while in ownership of another property, be it in the UK or anywhere else in the world (to buy to let, for instance), there is a 3% surcharge added to the rate of Stamp Duty you are required to pay. It is important to note that this is payable on the first £125,000 of all property and land transactions over £40,000. There are certain exceptions – for example, if the property you are buying is replacing your main residence.

Why Is SDLT Paid?

This is a tax levied by the Government on property transactions. The Land Registry will not register the buyer as a new owner of the Property until your conveyancing solicitor provides evidence that the stamp duty has been paid.

Under What Circumstances Is Stamp Duty Paid?

As explained above, Stamp Duty is paid on all UK property transactions over £125,000. It is a legal requirement and failure to do so will not only leave you unable to register your purchase at the Land Registry but will also incur penalties.

Your solicitor has 30 days from the completion date of your property transaction to file a Stamp Duty Land Tax (SDLT) return with HMRC.

The return is required for all properties above £40,000, even if there is no tax to pay. Exceeding the 30 day deadline will result in an automatic fixed penalty, with the severity of the fine depending upon the lateness of the return:

  • Within 3 months – £100
  • After 3 months – £200
  • If you have not filed your SDLT return within 12 months of the 30 day deadline expiring, you will be fined a tax-based penalty alongside the fixed one.

Actual payment of the Stamp Duty is also due within 30 days of the completion of your purchase and can be paid as soon as you have filed your return. Failure to meet the deadline will result in interest – set at HM Treasury's official rate – being charged daily until the payment is paid.

Other than buying a property beneath the £125,000 threshold, there are other occasions where you, personally, may be exempt from paying Stamp Duty.

These are:

  • Property is left to you in a will or given as a gift
  • Ownership is transferred to you as part of a divorce settlement, dissolution of a civil partnership or separation
  • You buy a leasehold of 7 years or more and the premium is less than £40,000, combined with an annual rent of below £1,000
  • You buy a new build where the property developer offers to pay the Stamp duty as part of the sales package

As far as HM Revenue and Customs is concerned, it is your responsibility to ensure that your Stamp Duty return is filed and payment received on time.

As your conveyancing solicitor, Simpson Millar will complete your Stamp Duty return and make the necessary payment on your behalf, guaranteeing that both are issued within the required timeframe and you are not left facing a financial penalty.

Buying or selling a house? Get a free quote now!

What Is The Land Registry?

The Land Registry is a Government department that registers the ownership – and change of ownership – of land and property throughout England and Wales. When a property transaction completes, it must be registered at the Land Registry.

This is a compulsory requirement, providing proof of ownership (guarantee of title), so that property owners no longer have to worry about the whereabouts of their deeds.

What Are Land Registry Charges And How Are They Calculated?

A Land Registry charge covers the cost of altering the record or registering ownership for the first time, and is calculated based upon the purchase price of the property.

The fee scale is as follows:

Property PriceFee (Post)Fee (Online)
0 to £80,000£40£20
£80,001 to £100,000£80£40
£100,001 to £200,000£190£95
£200,001 to £500,000£270£135
£500,001 to £1million£540£270

The Role Of Your Solicitor

As well as arranging for the prompt filing and payment of your Stamp Duty tax, Simpson Millar will register the purchase of your new property with the Land Registry as part of our comprehensive conveyancing services.

If you have any queries regarding the Stamp Duty and Land Registry process, contact one of the Conveyancing team at Simpson Millar today.

Get a Quote Today

Using our online quote tool you can quickly work out how much the legal services will cost you. Alternatively speak with our expert team who are on hand to offer you the quality assured Conveyancing service that you expect. We can advise on any aspect of the process and are happy to discuss how we can help make the process as swift and pain free as possible – we want to get you into your new home almost as much as you do!

Get a conveyancing quote online now or call us on 0800 206 1521 to obtain your quote and one of our friendly team will be able to start you on the path to your new home!




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