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Antony Antoniou – Luxury Property Expert

Stamp Duty Land Tax Q&A

Stamp Duty Land Tax Q&A

Stamp Duty Land Tax Q&A

I own and rent out a second property – if I add my wife to the mortgage and deeds for that property, will we need to pay the additional SDLT?

You might pay Stamp Duty Land Tax when you transfer a share in a property to a spouse or partner when you do one of the following:

  • marry
  • enter into a civil partnership
  • move in together

You pay Stamp Duty Land Tax if the chargeable consideration given in exchange for the share transfer is more than the current Stamp Duty Land Tax threshold for the property type.

An example of when you pay Stamp Duty Land Tax when no money changes hands

The owner of a property valued at £700,000, with an outstanding mortgage of £600,000, transfers half the property to their partner when they marry in October 2022. Their partner takes on 50% of the mortgage (£300,000).

HMRC charge Stamp Duty Land Tax on the amount paid for a property or the amount of ‘chargeable consideration’ given.

By taking liability for the mortgage, the owner’s partner has given ‘chargeable consideration’ of £300,000 for their share of the property, which is £2,500 Stamp Duty Land Tax (0% of £250,000 + 5% of £50,000).

An example of when you do not pay Stamp Duty Land Tax

A house has a value of £180,000. The owner of the property has equity of £90,000 and an outstanding mortgage of £90,000. The owner transfers a half share of the property to their partner.

Their partner:

pays cash for half of the equity — £45,000

takes responsibility for 50% of the outstanding mortgage — £45,000

So the chargeable consideration for Stamp Duty Land Tax is £90,000, made up of the:

cash payment

50% share of the outstanding mortgage

£90,000 is below the current Stamp Duty Land Tax threshold so there’s no tax to pay.

I bought a HMO last financial year and paid 3 % stamp duty. It was a 6 bedroom HMO at transaction. Can I claim back?

To qualify for multiple dwellings relief, you must be buying two or more properties (dwellings) in the same transaction or a series of linked transactions.

  • 2-5 properties:
  • If you are buying between 2 and 5 properties, residential MDR will apply.
  • 6+ or mixed-use properties:
  • If you are buying more than 6 properties, or a mixed-use (residential and commercial) property, you can apply non-residential SDLT rates, which are lower than residential rates.

MDR rates

A minimum of 1% tax must be paid on the purchase price

  • Residential property purchases are subject to the 3% additional SDLT rate
  • Mixed-use properties are exempt from the 3% surcharge and pay commercial stamp duty rates, not residential.
  • can 6 or more be on different locations but completing on same day ? please elaborate a bit more as it’s possible in up north investments.

if I buy land for dev or garages they will be exempt as not inhabitable?

Land would be taxed under the commercial/non-residential rates, as follows:

Band: market price £ Non-residential
0-150,000 0%
150,001 – 250,000 2%
Over 250,000 5%

I’ve just bought a 6 bed HMO and paid 16k stamp can I claim relief after now?

You can claim relief within 365 days

What happens if you bought a BTL and never rented the home can you get SDLT refunded (paid when bought) and not pay CGT?

You can only reclaim SDLT if you sell your residential home within 3 years, then designate the second property as your primary residence. If you then move in, you should be safe (although nothing is guaranteed) from CGT.

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