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Buy to Let Stamp Duty Calculator and Guide

Want to know how much stamp duty tax you will have to pay on your next property? Find out everything you need to know about paying residential stamp duty tax here. If you’re buying a single or additional property or you’re a first-time buyer, we can work out your stamp duty rates in seconds. Whether you’re a homeowner or buy to let investor, you can learn everything from the rates you will owe depending on your property price, to how you can file your tax return.

Use our specially devised ‘stamp duty calculator’ to work out how much stamp duty tax you could be charged on your next property investment.

The Stamp Duty Land Tax (SDLT) calculator takes into account your property price plus whether you’re purchasing one or more properties, showing a full breakdown of the taxable amounts. This expert calculator can also calculate stamp duty for first-time buyers.

Rates and reliefs are known to change frequently, for example, the stamp duty changes in 2016 saw significant alterations to how the property market works. Our buy-to-let tax calculator does all of the hard work for you by implementing the most up to date stamp duty rates.

Select Property Purchase Type:

Buy to Live
Buy to Let
First Time Buyer
Buy to Live

(Enter numbers only)

Stamp Duty due:
Effective Rate:
See Full Calculations below:
Tax Band % Taxable Sum Tax
less than £125k 0
£125k to £250k 2
£250k to £925k 5
£925k to £1.5m 10
rest over £1.5m 12
Buy to Let

(Enter numbers only)

Stamp Duty due:
Effective Rate:
See Full Calculations below:
Tax Band % Taxable Sum Tax
less than £125k 3
£125k to £250k 5
£250k to £925k 8
£925k to £1.5m 13
rest over £1.5m 15

*For purchases under £40k, SDLT is charged at 0%.

First Time Buyer

(Enter numbers only)

Stamp Duty due:
Effective Rate:
See Full Calculations below:
Tax Band % Taxable Sum Tax
less than £300k 0(2/5)*
£300k to £500k 5
£500k to £925k 5
£925k to £1.5m 10
rest over £1.5m 12

*For purchases over £500k, SDLT is charged at 2% from £125k to £250k and 5% from £250k to £925k.

8 Key Stamp Duty Points Points

1. Getting to Know Stamp Duty Land Tax
2. Residential Stamp Duty
3. So What are the Stamp Duty Rates?
4. Scotland and Wales Basic Stamp Duty Rates 2018

5. First Time Buyer Stamp Duty
6. The Difference between Freehold and Leasehold Rates
7. How and Where to Pay
8. Adding Stamp Duty to a Mortgage

Getting to Know Stamp Duty Land Tax for Buy to Let Investors

What is stamp duty? It’s a question that anyone entering buy to let investments wants to know and understanding it is one of our Top 10 Tips for Getting Started in Property Investment. Stamp duty land tax (SDLT) is a type of tax that must be paid by buyers of property or land across England and Northern Ireland. Instead of stamp duty, Scotland has its own, distinct Land and Buildings Transaction Tax with different rates, and Wales also uses a differently tiered system, so be sure to look into this further if purchasing property within these regions.

Who pays stamp duty? The type of property, whether it be residential or commercial, will affect whether you pay stamp duty at all and if so, how much will be due. Please note that stamp duty is not applicable on purpose-built student accommodation as it is a specific residence designed only for student lodging. The price of property also influences the rate paid. For example, you only have to pay stamp duty when buying a property over a certain amount, and the higher the cost of property, the more stamp duty you have to pay.

Residential Stamp Duty

It’s important to ensure your buy to let property falls into the residential category before going ahead and reading the rates. Those properties that aren’t residential include any utilised for commercial purposes or land that is used for agriculture or forests. Purchasing 6 or more residential properties at once in a single transaction is also not classed as residential.

Where residential and non-residential properties are combined – for example, if buying a hairdresser with a flat above as a single unit – this would be considered as mixed-use land or property. Anything else other than these abnormalities is considered to be residential property.

For buy to let residential investments, the stamp duty thresholds are slightly different from the standard bands. Non-investor homeowners don’t have to pay stamp duty on anything up to £125,000, whereas buy to let investors must start paying the tax from £40,000. The tax rate is calculated differently between each value band and the relevant rate of stamp duty is due on each portion of the price.

So, what are the Stamp Duty Rates?

The amount of properties you own impacts the rate of stamp duty paid. Buy to let investors are more than likely to have an outstanding property, and when owning more than one residential property, the higher rate stamp duty applies.

These are the standard stamp duty rates for residential property:

You should expect an increase of 3% on top of the basic SDLT rates when buying a buy to let property. The stamp duty rates 2018 for buy to let are as follows:

Let’s put this into practice for stamp duty on £400,000:

  • 0% stamp duty is owed on the first £39,999.99
  • 3% would be due on the portion of the price between £40,000 and £125,000
  • 5% would be due on the portion of the price between £125,000.01 and £250,000

8% would be due on the portion of the price between £250,000.01 and £400,000

The higher the property price, the higher the stamp duty bands continue to rise.

Scotland and Wales Basic Stamp Duty Rates 2018

The Scottish government reformed laws to introduce the land and buildings transaction tax which takes stamp duty’s place. Still a lump-sum tax paid on property and land, it is simply the stamp duty thresholds which make it different. Here are the rates:

*For properties below £40,000, only the lower rate applies.

Wales also operate a very similar system to that in England and Northern Ireland but with varying rates:

First Time Buyer Stamp Duty

With UK stamp duty, first time buyers benefit from some alleviations. But first of all, let’s qualify who a first time buyer actually is. A first time buyer is someone who has never owned or inherited a property before.

This means that regarding first time relief on stamp duty, buy to let investors are not eligible if they already own their personal home. To reiterate, initial buy to let properties don’t count for first time buyers if they are being purchased as a secondary property. However, if you have never previously bought a property and your first purchase is a buy to let, you will unfortunately still have to the standard buy to let stamp duty tax rates.

For first time buyers of non buy to let property, new laws state that you don’t have to pay stamp duty on any property up to the value of £300,000. After this, the portion of money between £301,000 and £500,000 will be taxed at a discounted rate. 5% stamp duty tax will be paid on every proportion between these amounts. After £500,000 stamp duty rates follow the usual pattern.

The Difference between Freehold and Leasehold Rates

Freehold is when a property and the land that it is built upon are owned outright. The owner does not have to pay any service charge or ground rent. You are responsible for maintaining the building.

Leasehold is when tenants lease the property from a freeholder. You own the property with the freeholder during your lease period. Leaseholders have to pay service charge and ground rent for maintenance of the building. Subject to restrictions by the freeholder.

Please note that stamp duty on property in new or existing freehold and leasehold agreements is owed. Freeholds follow the standard rates as above in relation to house prices, but leasehold stamp duty is paid on the price of the lease. When rent amounts to more than £125,000, a 1% tax must be paid on any portions of the price after this amount.

How and Where to Pay

Paying stamp duty is easy when you know how. A stamp duty land tax return should be sent to HMRC and paid within 30 days of completion of the property. When is completion? When all contracts have been signed off and you get your keys to enter the property, this is when you need to start thinking about paying stamp duty.

If you don’t pay within this time frame, you could be subject to interest rates or fines!

When using solicitors, conveyancers or agents to assist in property transactions, they may file a SDLT return to HMRC themselves and pay the stamp duty tax amount upon completion on the property on the buyer’s behalf. The tax would then be added into the solicitor fees to be paid by the buyer.

Adding Stamp Duty to a Mortgage

If you’re worried that you can’t cover the cost of stamp duty, it’s possible to borrow more money when you take out your mortgage. This way, you can use a loan to pay stamp duty tax’s substantial rates.

However, the downside of doing this is that after a long repayment period, the initial price of stamp duty will accumulate interest and cost you more money in the long run.

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