Helpful tips

Do you pay stamp duty land tax on leases?

Do you pay stamp duty land tax on leases?

Stamp Duty Land Tax (SDLT) is sometimes payable by tenants on leases. The SDLT payable is determined by the value of the lease, which is calculated based on any premium paid, the rent payable and the length of the lease. SDLT is more likely to be payable with medium to longer term leases or when the rents are higher.

What is the higher rate of stamp duty land tax?

The Higher Rates for Stamp Duty Land Tax (SDLT) came into force on 1st April 2016. The higher rate is calculated as a 3% surcharge on the standard rates and applies to all purchases of a second residential dwelling unless an exemption applies.

How does leasehold affect stamp duty?

If you buy a leasehold residential property, you will have to pay Stamp Duty on the purchase price of the lease. There may be additional charges if the lease purchased is unassigned (i.e. new), and there is rent to pay over the life of the lease.

What is lease premium stamp duty?

If the annual rent for the lease (not the NPV ) is less than £1,000, as a buyer you pay SDLT on the premium. This is at the same rate you would pay on the sale price of a freehold non-residential property. This means you’ll only have to pay SDLT if the premium is more than the threshold.

Who pays higher stamp duty?

Contents. You must pay the higher Stamp Duty Land Tax ( SDLT ) rates when you buy a residential property (or a part of one) for £40,000 or more, if all the following apply: it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world.

Who pays stamp duty on commercial leases?

The SDLT rate is based on any lease premium paid by the tenant and on the rent due under the terms of the lease (including VAT if applicable). The amount of ‘rent due’ is based on the first 5 years of rent payments.

Is there stamp duty on commercial leases?

Do I have to pay stamp duty on a commercial lease? If you are a tenant of a commercial property, it is your responsibility to calculate and pay SDLT on the lease on time. Landlords bear no responsibility for SDLT on the lease.

How is stamp duty calculated on a lease?

Stamp Duty Land Tax (SDLT) is normally chargeable on the surrender and regrant of a lease (provided the payment does not fall within the nil rate band) and is calculated by reference to the rent payable under the lease and any other financial consideration given.

How much is stamp duty on land and buildings?

Stamp Duty rates on land and buildings Type of property Consideration Stamp Duty Rate Residential First €1 million 1% Residential Excess over €1 million 2% Non-residential – 7.5%

Are there higher rates of stamp duty in the UK?

More detailed information is available in HMRC’s Stamp Duty Land Tax manual about: Agents can also catch up with the latest available webinar on the higher rates of Stamp Duty land Tax from 14 August 2018.

Do you have to pay extra stamp duty for lease extension?

For corporate entities extending a lease where the premium is over £40,000, the additional rates will also apply, irrespective of how many properties are owned. Despite the terminology used, a lease extension or variation operates as a surrender of the existing lease and the grant of a new lease.

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