Do I Have To Pay SDLT Return Fee?

If you are wondering whether or not you need to pay an SDLT Return Fee on the property that you’ve just purchased, you will find the answer to your question in the following blog post. In addition to explaining the eligibility criteria for the SDLT Return Fee, we will also explore the circumstances under which it is applied and by how much; as well as review the payment process.

Do I Have To Pay SDLT Return Fee?

Whether or not you have to pay the SDLT return fee depends on the value of your property and if it will be used for residential or non-residential purposes.

The Stamp and Duty Land Tax return fee is a tax levied by the government upon individuals who are purchasing land or property beyond a certain value. The current threshold for SDLT return fee in 2023 is £250,000 for residential property and £150,000 for non-residential property.

This means that if you have purchased land or property in the UK (or intend to) you will have to pay SDLT return fee on a property that is valued beyond the threshold. How much you pay will depend on factors such as the market value of the property, its location, and whether it is your first or second home.

However, if you are a first-time buyer, the threshold for the SDLT return fee increases to £425,000. This means that you will only be required to pay SDLT return fee if your property is valued at more than the threshold.

SDLT payments are usually due 14 days after the sale/purchase or transfer of land or property has taken place. This is also referred to as the transaction date. Otherwise, it can also be either of the following dates:

• when the buyer is entitled to take possession of the property
• when the first rent payment is due
• when substantial completion has taken place

That said, no SDLT return fee is due if you own a property as a result of the following situations:

• if no money or other payment changed hands and the property was transferred
• if you’ve been left the property in a will
• if you’ve received property because of divorce or civil partnership dissolution

How Much Do I Have To Pay As SDLT Return Fee?

The amount that you need to pay as an SDLT return fee depends on (a) the value of the property and (b) the nature of the property and its use. For instance, if the property that you’ve purchased will be your main residence, the following SDLT return fee rates will apply, based on the property’s value:

• if the property is valued up to £250,000, the SDLT Return Fee will be 0%
• if the property is valued between £250,001 and £925,000, the SDLT Return Fee will be 5%
• if the property is valued between £925,001 to £1.5 million, the SDLT Return Fee will be 10%
• if the property is valued at over £1.5 million, the SDLT Return Fee will be 12%

On the other hand, if you are a first-time buyer, the following rates will apply:

• if the property is valued up to £425,000, the SDLT Return Fee will be 0%
• if the property is valued between £425,001 and £625,000, the SDLT Return Fee will be 5%

Meanwhile, in the case of second properties, the following rates will apply:

• if the property is valued up to £250,000, the SDLT Return Fee will be 3%
• if the property is valued between £250,001 and £925,000, the SDLT Return Fee will be 8%
• if the property is valued between £925,001 and £1.5 million, the SDLT Return Fee will be 13%
• if the property is valued at over £1.5 million, the SDLT Return Fee will be 15%

How Do I Pay SDLT Return Fee?

There are many options to pay the SDLT Return Fee on the property that you’ve just purchased. Below is a list of suggestions:

• you can make an online payment from your bank account using the mobile banking option
• you can also use your debit card or credit card to make an online payment
• you can pay through bank transfer and using sort code 08 32 10, account number 12001020 and account name HMRC Shipley
• you can pay by cheque by making it payable to HM Revenue and Customs only

Returns can be filed online as well by ordering a paper form.

Conclusion:

The above discussion helps to conclude that SDLT Return Fee is applicable on all properties purchased and valued above £250,000. However, the amount that you are required to pay will depend on the market value of the property and its nature.

References:

Stamp Duty Land Tax online and paper returns – GOV.UK

What is Stamp Duty? | My Home Move Conveyancing

Stamp duty land tax | The Law Society

Stamp Duty Land Tax: What you should know (2023 update) | TheAdvisory