HMRC SDLT: SDLTM29815 – SDLT rates when the relief is available

SDLT Rates and Reliefs

This section of the HMRC internal manual provides guidance on Stamp Duty Land Tax (SDLT) rates when specific reliefs are available. It outlines the principles and concepts related to SDLT calculations and applicable reliefs.

• Explains SDLT rates applicable under different circumstances.
• Details the conditions under which reliefs can be claimed.
• Provides examples of how to apply these reliefs.
• Clarifies the impact of reliefs on SDLT liabilities.

Understanding SDLT Rates with Relief Available

When you buy a property, you often have to pay a tax called Stamp Duty Land Tax (SDLT). However, if you qualify for relief as a first-time buyer, the rates you pay can be reduced. Here we will explain how the SDLT rates work when this relief is available.

Current SDLT Rates for First-Time Buyers

For those buying their first home, the SDLT rates are different from the usual rates. If relief applies, here are the current rates:

• 0% on the first £425,000 of the purchase price
• 5% on the amount above £425,000 up to £625,000

Example Calculation

Let’s say a first-time buyer purchases a house for £600,000. The SDLT due would be calculated as follows:

• On the first £425,000 of the property’s price: 0% = £0
• The remaining £175,000 (which is the portion above £425,000) will be taxed at 5%: 5% of £175,000 = £8,750

Therefore, the total SDLT due for a £600,000 house purchase is £8,750.

Previous SDLT Rates for First-Time Buyers

It’s also important to note that SDLT rates for first-time buyers have changed in the past. From 22 November 2017 to 22 September 2022, the rates were:

• 0% on the first £300,000 of the purchase price
• 5% on the amount above £300,000 up to £500,000

Example of Previous Rates Calculation

For instance, if a first-time buyer purchased a property for £400,000 during the previous rate period, the calculation would look like this:

• On the first £300,000 of the property’s price: 0% = £0
• The remaining £100,000 (which is the portion above £300,000) will be taxed at 5%: 5% of £100,000 = £5,000

In total, the SDLT payable on a £400,000 property during this time would be £5,000.

Important Notes to Keep in Mind

Here are some key points regarding SDLT rates and relief:

• The relief applies only to first-time buyers. If you are purchasing a second home or are not deemed a first-time buyer, you will pay the standard SDLT rates.
• To qualify as a first-time buyer, you must not have owned any property anywhere in the world before the purchase.
• If the property is a shared ownership home, you can still benefit from relief, provided you meet the qualifying criteria.
• The relief is only available on residential properties, and not on commercial properties.

When to Use the Current Rates

Use the current SDLT rates when you are making a purchase on or after 22 September 2022. If you purchased a property before this date, refer to the previous rate structure discussed above.

How to Ensure You Claim Relief Correctly

To ensure you claim the correct relief on your SDLT, follow these steps:

• Check if you meet the first-time buyer criteria.
• Make sure you complete the SDLT return accurately, filling in all relevant sections.
• Keep records of your previous property ownership to verify your first-time buyer status if needed.

Further Resources

If you need more information or assistance regarding SDLT, consider visiting this [detailed guide on SDLT rates and relief](https://stampdutyadvicebureau.co.uk/hmrc/SDLTM29815).

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