Residential VS Non-Residential SDLT

Couple looking at their new home

Buying property, whether commercial or residential, means you will have to pay your stamp duty land tax (SDLT). Although there is a UK stamp duty calculator that you can use on the government’s website, the authorities will leave the thorough analysis and computation to the payers. For this reason, it is important to know the factors that affect the cost of your SDLT, and the process on how to calculate it.

There are several factors affecting your SDLT rate. However, the major factor that determines this is whether the purchase property is residential or non-residential.

Residential SDLT Rates

In this category, different rules apply to the first time or non-first time buyer. If you are not a first-time buyer, you will have to pay the incremental rates when the purchase price goes beyond £125,000.

If you are a first-time buyer and the price of the property is £500,000, you do not have to pay a tax on the first £300,000. You just need to pay for the remaining portion from £300,001 to £500,000.

You are entitled to this benefit if you meet the following criteria:

  • If you or all the buyers sharing the property are first-time buyers
  • If the purchase price does not exceed £500,000
  • If the purchase was completed on or after 22 November 2017
  • If the purchase price goes beyond £500,000, you will have to follow the same rates as to the non-first time buyers

Non-Residential SDLT Rates

Like the rates for the residential SDLT, you will have to pay the incremental rates when the purchase price exceeds the imposed threshold. For the non-residential property buyers, the threshold is £150,000.

The property is non-residential if it meets one of the following conditions:

  • Mixed-used property
  • Agricultural property
  • Commercial
  • If you buy six or more residential properties in one transaction
  • If the property is not for residential purposes

Different rules apply when you are buying non-residential leasehold properties. If you have trouble computing your SDLT, you may use any UK stamp calculator on the internet. However, you need to make sure that it is accurate and updated. You may also hire a professional who will do it for you.