SDLT for property investors

If you already own a home or another residential property, a buy-to-let purchase is charged at the higher rates: 5% on the first £125,000, 7% from £125,001 to £250,000, 10% from £250,001 to £925,000, 15% from £925,001 to £1.5m and 17% above that. Each rate applies only to the slice of the price in that band. These apply to purchases in England and Northern Ireland.

Because companies pay the higher rates on every purchase of a dwelling in England or Northern Ireland, whether or not they own other property. Individuals only pay the surcharge if they already own another residential property and aren't replacing their main home. So a landlord's first company purchase pays the same higher rates as their tenth. It's one of the costs to weigh when deciding whether to buy personally or through a company.

When a company, or another non-natural person, buys a dwelling for more than £500,000. Instead of the banded calculation, 17% is charged on the whole price. But relief from the flat rate is available for a genuine property rental business letting to unconnected tenants, and for developers and traders. Where relief applies, the company pays the higher banded rates instead. The relief is withdrawn if conditions stop being met within three years.

Usually not. Relief from the 17% flat rate is for genuine property rental businesses letting to unconnected tenants. If someone connected with the company, such as a director, shareholder or a member of their family, lives in the property, the relief isn't available, and it can be withdrawn if that happens within three years of the purchase. ATED relief is affected too. A company property for family use needs separate advice before you buy.

Nothing directly. Multiple dwellings relief was abolished for purchases completing on or after 1 June 2024, unless contracts were exchanged on or before 6 March 2024. The main remaining option for bulk purchases is that six or more dwellings bought in a single transaction can be treated as non-residential, which uses lower rates and no surcharge. For fewer than six, the residential rates are applied to the total price of all the linked purchases, which can push more of it into the higher bands.

Yes, if the six or more dwellings are bought in a single transaction, you can choose to treat the purchase as non-residential. The non-residential rates are 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above that, with no higher-rates surcharge. On a block of flats this can be much cheaper than residential rates. The dwellings must genuinely form one transaction, such as one contract with one seller.

A property that includes both residential and non-residential elements, such as a shop with a flat above, is usually charged at the non-residential and mixed-use rates: 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above. The higher-rates surcharge doesn't apply. HMRC looks closely at claims that a property is mixed use, for example a house with a paddock, so the facts need to support it.

You are, as the buyer. Your conveyancer usually prepares and files the return, but the legal responsibility for the tax, and for any underpayment, interest and penalties, sits with you. That matters on investor purchases, where claims such as non-residential treatment, mixed use or relief from the 17% rate can be challenged by HMRC. Get advice on any claim that reduces the tax before the return is filed.

It can. A gift with no payment is normally exempt, but taking over a mortgage counts as paying a price. If your son takes over a £150,000 mortgage on a property you give him, SDLT is worked out on £150,000, and if he already owns a home, at the higher rates. Transfers between spouses on divorce under a court order or formal agreement are exempt.

No. SDLT is charged on land and buildings, not on furniture and other moveable items. If you're buying a furnished property, part of the price can be allocated to the furniture, and SDLT is charged only on the rest. The split must be a just and reasonable reflection of what the items are worth, and HMRC challenges inflated figures. Fixtures that form part of the building, such as a fitted kitchen, count as part of the property.

No. Wales has Land Transaction Tax instead of SDLT, with its own rates. Since 11 December 2024, the higher residential rates for additional properties start at 5% up to £180,000 and rise in steps to 17% above £1.5m. Companies always pay the higher rates. The bands and reliefs differ from England, so calculations for Welsh properties need to use the Welsh rules.

Scotland has Land and Buildings Transaction Tax. Investors usually pay the Additional Dwelling Supplement, 8% of the whole purchase price since 5 December 2024, on top of the normal LBTT rates. It applies to most residential purchases by companies even if they own no other dwellings. Revenue Scotland collects LBTT, and its rules and reliefs differ from SDLT, so treat Scottish purchases separately.

Often it's the same for an existing landlord, because both pay the higher rates on a buy-to-let. The differences are the 17% flat rate for a company buying a dwelling over £500,000, unless a relief applies, and the fact that a company pays the higher rates even on its first purchase. Looking ahead, moving a property into a company later means paying SDLT again on market value, so decide the long-term owner at the start.

Generally not on a buy-to-let. Refunds of the higher rates are for individuals who paid the surcharge when buying a new main home and then sell their previous main home within the time limit. A purchase that's an investment from the start doesn't qualify. If you think a purchase was charged incorrectly, for example where mixed use or six-dwelling treatment was missed, an amendment may still be possible within the time limits.

No. Buying shares in a company that owns property is subject to stamp duty on shares at 0.5%, not SDLT on the property. That can make buying a property-owning company look attractive. But the company keeps the properties' original base cost for gains, may come with liabilities, and lenders and buyers will want thorough due diligence. It needs careful advice on both sides of the deal.