UK COMMERCIAL stamp duty calculator - SDLT, LBTT and ltt

An unavoidable tax that is shrouded in regulations, differing rates, and exemptions, therefore determining the exact cost of Stamp Duty in relation to your next property development project can be a bit of a minefield. Our Commercial Stamp Duty Calculator can help you gain a clear insight into the potential costs involved to help you budget more effectively.

Stamp Duty can be traced back to the 1600’s

Stamp Duty is a government-imposed tax that is levied on a single property purchase. It derives its name from the fact that a stamp was physically impressed onto a document to show that the Stamp Duty had been paid, only then, was it legally effective. However, things have been modernised a little since then. Stamp Duty can be dated back to the 1600s, with the first recorded Stamp Duty payment taking place in Venice before being adopted in other parts of Europe, with the first known record in England dating back to 1694. “Stamp Duty Land Tax” (SDLT) was introduced in 1986 for land and property transactions, as an agreement to transfer securities and shares. This was updated in 2003 as a self-assessed transfer tax that is placed on land transactions, with an exemption for market makers and some large banks.

The following figures are current rates rates are based on property value or lease premium or transfer value on a commercial property:

• The portion of the property priced up to £150,000=Zero
• Properties priced between £150,000 – £250,000 = 2%
• Properties priced over £250,001 = 5%

As an example, if a buyer purchase a commercial property for £600,000 nothing would be payable on the first £125,000, 2% would be payable on the next £125,000 and 5% would be payable on the balance of £350,000. Therefore using the commercial stamp duty calculator would give us a figure payable of £19,500 and will display the actual rate (%) of 3.3%.

SCOTLAND (LBTT)

In Scotland, the equivalent to Stamp Duty is Land and Buildings Transaction Tax (LBTT). If a person is buying their main property then they do not need to pay this tax on properties which cost up to £145,000, regardless of whether a person is a first time buyer. If a person is buying an additional property then they may be required to pay an extra 4% on top of the property’s purchase price, as well as the standard LBTT rates below.

• The portion of the property priced less than £145,000 = Zero (*)
• Properties priced between £145,000 – £250,000 = 2% (additional dwelling = 4%)
• Properties priced between £250,000 – £325,000 = 5% (additional dwelling = 9%)
• Properties priced between £325,000 – £725,000 = 10% (additional dwelling = 14%)
• Properties priced above £750k = 12% (additional dwelling = 16%)

* Additional dwellings that cost less than £40k will require 0% tax, while purchases that cost between £40k to £145k will require 4% on top of the full purchase price.

WALES (LTT)

In Wales, the equivalent of Stamp Duty is Land Transaction Tax (LTT) and the rate depends on when the property was purchased, whether it is residential or not, and the cost of the property. Below are the taxes that apply to main residential homes that were purchased after 1st July 2021

• The portion of the property priced up to £180,000 = 0%
• Properties priced between £180,000 – £250,000 = 3.5%
• Properties priced between £250,000 – £400,000 = 5%
• Properties priced between £400,000 – £750,000 = 7.5%
• Properties priced between £750,000 – £1.5m = 10%
• Properties priced over £1.5m = 12%

NORTHERN IRELAND

*Adheres to the same Stamp Duty (SDLT) regulations as England.

Commercial Stamp Duty – Everything you need to know

Before we go into more depth in regard to our Commercial Stamp Duty Calculator, we have put together a comprehensive but concise guide that details all you need to know about Stamp Duty in England and Northern Ireland.

First Time Buyer Stamp Duty

First Time Buyers will not pay any Stamp Duty Land Tax for properties priced up to £300,000. This also applies to properties that have been purchased via a government-approved shared ownership scheme.

Properties that cost above £300,001 will command a Stamp Duty payment of 5% of the property purchase price, this figure increases to 10% for properties that cost over £925,001, and 12% on properties that cost over £1.5m.

Shared Ownership Properties Stamp Duty

A Shared Ownership Property is classified as your first home, as individuals are only eligible for such schemes if they are purchasing their first property. The buyer is given the option to pay the Stamp Duty up front, however, most share purchases of this kind fall below the Stamp Duty threshold of £300,000.

Second Home and Buy-to-Let Stamp Duty

Purchasing a second property (home), or purchasing with a partner who already owns a property will incur a surcharge of 3%. This does not apply to properties that have a purchase price of £40,000 or below.

If an individual does not declare that they already own a property then they may be subject to a very large fine and may be accused of fraud. Holiday Homes, Buy-to-Let properties, and any other type of second property will be classed as a second home.

Stamp Duty for Commercial or Mixed Use Properties

Stamp Duty for non-residential or mixed use properties (dwelling & non-residential, for example, a shop, with living quarters above) is as follows.

• Properties up £150,000 = Zero
• Properties between £150,000 – £250,000 = 2%
• Properties over £250,000 = 5%

Non-residential properties and land includes shops, office buildings, agricultural buildings, forests, and any other type of land that will not be used for residential purposes.

Commercial Leasehold Properties Stamp Duty

In the case of an existing lease, the lease will be assigned to the new purchaser who must pay a lump sum for the new assignment, in addition to paying Stamp Duty Land Tax. The same SDLT rates for freehold properties will usually apply to existing commercial and non-commercial leases.

For new leases, SDLT will depend on the amount that is paid for the lease and any rent that is due. If the rent amount is deemed as nominal, then you will only pay tax on the cost of the lease (the premium).

Limited Company Owned Properties Stamp Duty

For a residential property, the usual 3% surcharge will apply on properties that have been purchased for over £40,000, regardless of whether this is the company’s first property purchase.

Non-residential or mixed use properties will be exempt from the 3% surcharge.

Corporate Owned Properties Stamp Duty

Corporate-owned residential properties that cost over £500,000 will be subject to a flat rate of 15% SDLT – This applies to companies, partnerships, and investment schemes.

Corporate Stamp Duty Land Tax can be extremely complex and can differ based on a range of circumstances, therefore, it is strongly advised to consult with professionals regarding each specific case.

Stamp Duty – Additional Information

• Stamp Duty cannot be paid in instalments
• Stamp Duty must be paid within 14 days of property purchase completion date
• You claim back the 3% surcharge on your second home if you sell your first home within three years of buying your new property. The claim must be made within three months of selling your first home.
• You will be exempt from SDLT if you have inherited a property in a will, no money has been paid for the property, or the property has been transferred as part of a divorce/end of a civil partnership.

How do I use the Commercial Stamp Duty Calculator? 

Using our Commercial Stamp Duty Calculator couldn’t be simpler. First select the UK country where the property is. Then select whether the purchase relates to a first time buyer purchase, and investment property (second home, buy-to-let/HMO), your primary residence where you and/or your family will reside, finally whether you are buying a commercial/non residential property. Click ‘calculate’ and your stamp duty will be displayed as a figure and also as a pie chart which will illustrate an overall percentage.  Refer to our other calculators for informed decisions such as our EPC finder which will also detail total internal property area in SQ/FT.