What is stamp duty (SDLT)?
tamp Duty Land Tax (SDLT), commonly known as stamp duty, is a tax charged on property and land purchases in England and Northern Ireland. Whether you are purchasing a residential property, commercial premises, investment property, or land through a limited company, SDLT may be payable depending on the purchase price and circumstances of the transaction.
The tax is paid to HM Revenue & Customs (HMRC) and must usually be reported and paid within 14 days of completing the purchase.
Most buyers appoint a solicitor or conveyancer who will submit the SDLT return and arrange payment on their behalf. Following completion, you should receive a completion statement showing a breakdown of legal fees, taxes, and any SDLT paid.
Do Limited Companies Pay Higher Stamp Duty?
In many cases, limited companies purchasing residential property pay higher rates of SDLT than individual buyers.
This is particularly relevant for:
- Buy-to-let property purchases
- Property investment companies
- Special Purpose Vehicles (SPVs)
- Property development companies
- Corporate property acquisitions
The exact SDLT payable depends on several factors, including:
- Purchase price
- Property type
- Whether the property is residential or commercial
- Whether reliefs or exemptions apply
- Current HMRC SDLT rules
Limited companies purchasing residential property are generally subject to higher SDLT rates than owner-occupiers.
The SDLT is calculated using a progressive system, meaning different rates apply to different portions of the purchase price rather than a single rate on the entire amount.
Below are the current rates of SDLT:
| Purchase Price Bands (£) | Stamp Duty Percentage Rate (%) |
| Up to £125,000 | 5% |
| Above £125,000 and up to £250,000 | 7% |
| Above £250,000 and up to £925,000 | 10% |
| Above £925,000 and up to £1,500,000 | 15% |
| Above £1,500,000 | 17% |
Example of how it impacts purchasing a property
Here is an example of how stamp duty land tax would be calculated if you are buying a house through a limited company. The specifics for this example is that your limited company is purchasing a freehold residential property on the 15st April 2026 that is valued at £750,000 and you are looking to calculate the expected stamp duty that you would pay upon the offer being accepted on this property. The calculation for the stamp duty due on this property uses the stamp duty calculator provided by the GOV.UK website.
| Purchase Price Bands (£) | Stamp Duty Percentage Rate (%) | SDLT Due (£) |
| Up to £125,000 | 5% | £6,250 |
| Above £125,000 and up to £250,000 | 7% | £8,750 |
| Above £250,000 and up to £925,000 | 10% | £50,000 |
| Above £925,000 and up to £1,500,000 | 15% | £0 |
| Above £1,500,000 | 17% | £0 |
Therefore, as broken down in the table above the amount of tax that is expected to be paid upon a successful offer for buying a house worth £750,000 would be £65,000 of stamp duty land tax paid to HMRC. Therefore showing that it is a large cost that should be though about when looking at buying a house or land.
When and How to pay?
We briefly discussed this at the start of the article buy we will go into more detail now. First and foremost, the 'when' of paying your tax due. You are required to file the return, called the SDLT1 return, to HMRC as well as pay the amount due within 14 days of completing your purchase. If this 14 day window is missed then HMRC are highly likely to impose a penalty starting at £100 if not paid within the 3 months after completion but this can rise to £200 the tax is still unpaid after 3 months.
In rare cases when the land tax has not been paid 12 months after the completion date then they may start to impose tax-based penalties. These are charged as a percentage of the outstanding tax due, for example if the return is late by up to 12 months then a further amount of penalty would be charged of 10% of the duty amount, but this is capped at £300.
When it comes to 'how to pay' this typically is the easy part of buying the house as this is normally handled by your solicitor/conveyancer. They will more often then not collect the money from you before completion, then they will file the SDLT1 return to HMRC on your behalf and send the payment to HMRC on the day the keys are handed over (completion day). Whether it is yourself or your solicitor/conveyancer making the payment it is helpful to note that the payment to HMRC is done via electronic payments online via either Online Banking, CHAPS, Debit card (for smaller amounts) or BACS.
Looking For Further Information?
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