Do I have to pay Stamp Duty Land Tax (SDLT) on commercial property?

Stamp Duty Land Tax (SDLT) is payable to the Inland Revenue on purchases and leases of certain values. This applies to property or land which is situated in England, Wales or Northern Ireland and applies to those over a certain price. As legislation currently stands, the SDLT criteria for residential properties is £125,000, but for commercial land and property, the threshold is £150,000.

Whether you purchase a freehold property, new or existing leasehold, shared ownership scheme or have been transferred property for payment, you are expected to pay tax.

How much am I expected to pay?

For Freehold sales and transfers the value of the transaction is taxed according to each slice that fits into the following tax bands:

  • Up to £150,000 there is no SDLT payable
  • The portion from £150,001 to £250,000 attracts an SDLT rate of 2%
  • The portion above £250,000 attracts an SDLT rate of 5%

SDLT is also payable on some leases and this depends on the terms of the lease (i.e. how long the lease is for, the amount of rent payable each year and any lease premiums payable). Your chosen solicitor will calculate the likely amount of SDLT at the outset so that there are no nasty surprises at the end, using the following rates:

  • Up to £150,000 there is no SDLT payable
  • The portion from £150,001 to £5,000,000 attracts an SDLT rate of 1%
  • The portion above £5,000,000 attracts an SDLT rate of 2%

You should also be aware that if VAT is payable in addition to the purchase price, then the SDLT is payable on the whole amount of the price plus the VAT.

When should it be paid?

To ensure that you are not penalised or incur interest charges, SDLT must be paid within 30 days of the 'effective' land transaction date and this is usually when the contracts have been signed.

Please also note that SDLT is payable on purchases by the buyer not the seller, and on leases by the tenant and not the landlord. Additionally, if you are involved with a property costing over a certain amount, you may be exempt or will be required to pay a partial amount of SDLT. However, we would recommend you seek specialist legal advice to ensure you meet the requirements for a reduction.

Can Stamp Duty change?

Stamp Duty can often change depending on government legislation, so it is important that you are up to date with how it is currently calculated. In recent history, it seems to be changing every 2-5 years with the latest changes to Commercial Property having come into place 17 March 2016.

At Forbes Solicitors, we have a dedicated team of Commercial Property Solicitors who will be able to assist on matters regarding Stamp Duty Land Tax and are able to advise on the most current and up to date guidelines which are relevant to your property. For more information, call us on freephone 0800 975 2463 or contact us by email today.


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22 Jan 2019

Commercial Property


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