Stamp duty is a tax that is payable when you buy a property in the UK. The amount of stamp duty that you have to pay depends on the purchase price of the property, and whether you are buying the property as a primary residence or as a buy-to-let investment. In this article, we’ll focus on the stamp duty rates for buy-to-let properties. Here at Aventine Property, we offer deal sourcing services- from initial research to property completion.
What is stamp duty?
Stamp duty, also known as stamp duty land tax (SDLT), is a tax that is levied by the UK government when you buy a property. The amount of stamp duty that you have to pay depends on the purchase price of the property and whether you are buying the property as a primary residence or as a buy-to-let investment.
Stamp duty rates for buy-to-let properties
If you are buying a property as a buy-to-let investment, you will have to pay an additional 3% stamp duty surcharge on top of the standard stamp duty rates. This surcharge was introduced by the UK government in April 2016 as a way of discouraging buy-to-let investments and helping to level the playing field for first-time buyers.
Here are the current stamp duty rates for buy-to-let properties in the UK:
- 3% on properties up to £125,000
- 5% on properties between £125,001 and £250,000
- 8% on properties between £250,001 and £925,000
- 13% on properties between £925,001 and £1.5 million
- 15% on properties over £1.5 million
To give you an idea of how this works in practice, let’s say you are buying a buy-to-let property for £300,000. The standard stamp duty rate for a property of this value would be £5,000. However, because you are buying the property as a buy-to-let investment, you will have to pay an additional 3% surcharge, which works out as £9,000. This means that the total stamp duty payable on the property would be £14,000. further details about stamp duty on buy to let property click here.
Stamp duty exemptions and reliefs
There are some exemptions and reliefs available that can reduce the amount of stamp duty that you have to pay on a buy-to-let property. For example, if you are buying multiple properties in a single transaction, you may be eligible for a lower rate of stamp duty.
In addition, if you are buying a property with a value of less than £40,000, you will not have to pay any stamp duty at all. However, it’s worth noting that properties of this value are extremely rare, particularly in areas where buy-to-let investments are popular.
It’s also worth noting that there are no exemptions or reliefs available for the 3% stamp duty surcharge that applies to buy-to-let properties. This means that regardless of your circumstances, if you are buying a property as a buy-to-let investment, you will have to pay the additional 3% surcharge on top of the standard stamp duty rates.