Published On: Mon, Jun 17th, 2019

Stamp Duty Land Tax UK: Can stamp duty be added to a mortgage? When SDLT must be paid | Personal Finance | Finance

Upon buying property or land in England or Northern Ireland, Stamp Duty Land Tax (SDLT) may be required to be paid to HMRC. The tax only applies if the value of the purchase exceeds the SDLT threshold, and the purchase is not covered by an exemption. The current threshold for residential properties is £125,000 for residential properties, while it stands at £150,000 for non-residential land and properties. Different rules apply to those who are first-time buyers.

As the amount payable depends on a number of factors, it’s possible to work out how much a person should pay in Stamp Duty by using a Stamp Duty Land Tax calculator.

The HMRC stamp duty calculator can be found online at the government website.

An SDLT return must be sent to HMRC and the tax must be paid within 14 days of the sale reaching completion.

Should a person have a solicitor, agent, or conveyancer, then they will usually file the return and pay the tax on the individual’s behalf – adding the amount to their fees.

They will also claim any eligible relief, such as the potential reduction in SDLT for first-time buyers.

If these figures do not offer this service, then one can file a return and pay the tax themselves.

Visit the government website in order to see in which situations a return is not required to be filed.

The government website warns: “You may be charged penalties and interest if you do not file your return and make your payment within 14 days of completion.”

Stamp duty is different to a mortgage, in that the former payment is made to HMRC.

A mortgage, however, is the loan which should be repaid to the lender – such as one’s bank or building society.

Some people may decide to borrow more money from a lender than what they need to cover the mortgage, so that the loan covers the cost of the stamp duty.

This would be required to be repaid over the mortgage repayment term, and may affect one’s loan-to-value ration (LTV).

It could be worth seeking advice from a mortgage expert on whether adding stamp duty to a mortgage is the right decision.

For residential properties valued above the threshold, stamp duty rates are split into bands.

The rate that is payable is a percentage of the purchase price.

What are the current stamp duty rates in the UK?

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Stamp Duty Land Tax UK: Can stamp duty be added to a mortgage? When SDLT must be paid | Personal Finance | Finance