What is stamp duty and when do you have to pay it?

Any non-residential or mixed-use property purchased for more than £150,000 is subject to stamp duty. Non-residential property generally refers to commercial property or property that is not suitable for living. A mixed property is one that has both residential and non-residential elements, such as an apartment with a store underneath.

For tax purposes, the category also includes six or more residential properties purchased in a single transaction.

You also pay stamp duty on agricultural land, even if it is part of a residential property, for example a house with fields.

You may pay a higher duty rate for multiple purchases or transfers from the same seller.

The tax is also calculated differently to residential stamp duty. Two amounts are calculated separately and then added together; the purchase price of the lease and the value of the annual rent you pay.

Since 2021, non-UK residents have had to pay higher stamp duty when purchasing property in England and Northern Ireland.

The additional levy is two percentage points higher than the rate applied to UK residents in the given tax bracket. For example, where a UK resident will pay 5% tax on a property purchased between £250,001 and £925,000, a non-UK resident will pay 7%.

Foreign buyers also face an additional 2% surcharge on top of the existing 3% tax on second homes and rental properties.

Your solicitor should be able to help you arrange payment of stamp duty or simply carry out the transaction on your behalf.

If you have a solicitor or conveyancing agent acting for you they can submit the stamp duty return online, but if you are handling it yourself this must be done via a paper form. You can order the form you need – SDLT1 – online or by calling HMRC.