How much SDLT do you pay when selling one home and buying a £310,000 buy-to-let in your own name?

Introduction

People often search for this issue when they are selling one property and buying another at the same time, especially where the new purchase will be let out rather than lived in. The key point is that Stamp Duty Land Tax, or SDLT, is not charged by reference to whether the property is a buy-to-let. The main questions are whether the property is residential, who is buying it, and whether the buyer will own more than one dwelling at the end of the day of completion.

The Question

A buyer is selling one property and purchasing a residential buy-to-let flat for £310,000 at the same time. The new property will be bought in the buyer’s own name. On the facts given, the buyer will own only one property at any time. The buyer wants to know how much SDLT will be payable.

Nick’s Explanation

Nick’s core explanation was that if the buyer purchases the property personally and does not own any other residential property at the point of completion, the standard residential SDLT rates apply. On a purchase price of £310,000, that produces SDLT of £5,500.

He also explained that the result would be very different if the purchase were made through a company. In that case, the higher rates for additional dwellings would apply to the whole price, producing a much larger SDLT bill.

As he put it in substance, SDLT is not determined by the fact that the property is intended as a buy-to-let or an HMO. The important issue is the ownership structure and whether the transaction falls within the higher rates rules.

The Law

SDLT on residential property is charged under the Finance Act 2003. The amount payable depends on the chargeable consideration and the rate bands in force at the effective date of the transaction, usually completion.

Where an individual buys a residential property and does not end the day owning an additional dwelling, the standard residential rates apply.

Where a purchaser is a company buying residential property, the higher rates for additional dwellings generally apply automatically, even if the company owns no other dwellings at that time.

For the rates used in Nick’s explanation, the standard residential bands were:

• 0% on the first £125,000
• 2% on the portion from £125,001 to £250,000
• 5% on the portion above £250,000 up to £925,000

For a company purchase attracting the higher rates, the rates used were:

• 5% on the first £125,000
• 7% on the portion from £125,001 to £250,000
• 10% on the portion above £250,000 up to £925,000

Ground rent does not usually affect the SDLT calculation on a straightforward freehold purchase. If the flat is leasehold, SDLT can in some cases also arise on the net present value of the rent, but a modest annual ground rent of around £100 would not normally create a material SDLT charge in an ordinary transaction of this kind.

Analysis

The practical analysis is straightforward on the facts given.

First, the purchase price is £310,000, so the transaction falls within the ordinary residential SDLT bands.

Second, the property is being bought in the buyer’s own name, not through a company.

Third, the buyer says they will only own one property at any time. That matters because the higher rates for additional dwellings are generally charged only where, at the end of the day of completion, the buyer owns an additional residential property and the replacement of a main residence rules do not remove the surcharge.

On those facts, the standard residential rates apply:

• 0% on the first £125,000 = £0
• 2% on the next £125,000 = £2,500
• 5% on the remaining £60,000 = £3,000

Total SDLT: £5,500.

If instead the same property were bought by a company, the higher rates would apply to the full price:

• 5% on the first £125,000 = £6,250
• 7% on the next £125,000 = £8,750
• 10% on the remaining £60,000 = £6,000

Total SDLT: £21,000.

The fact that the flat will be let out does not by itself create the surcharge. The surcharge question turns on the statutory ownership tests, not on whether the property is an investment property.

Outcome

On the facts stated, if the buyer purchases the £310,000 flat personally and owns only one property at completion, the SDLT is £5,500.

If the same purchase is made through a company, the SDLT would be £21,000 using the rates set out in Nick’s explanation.

Practical Steps

• Confirm who the buyer will be: the individual or a company.
• Check exactly what properties the buyer will own at the end of the day of completion.
• If a sale and purchase are linked in timing, make sure the completion dates are coordinated properly.
• If the flat is leasehold, ask the conveyancer to confirm whether there is any separate SDLT charge on the lease rent, although a low ground rent will often have little or no practical effect.
• Ask the conveyancer or tax adviser to calculate SDLT using the rates in force on the actual completion date, as rates can change.

Conclusion

Where a person sells one property and buys a £310,000 residential buy-to-let in their own name, and they own only one dwelling at completion, the usual result is standard residential SDLT of £5,500. The intended use as a rental property does not by itself increase the tax. The position changes significantly if the buyer is a company.

Legal References Used

• Finance Act 2003
• Stamp Duty Land Tax residential rate bands applicable to the calculation used in the explanation
• Higher rates for additional dwellings under Finance Act 2003, Schedule 4ZA

This page was last updated on 22 March 2026.

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