Property Taxation Flashcards
Who pays Stamp Duty Land Tax / Land Transaction Tax?
Buyer of residential or non-residential property
How is SDLT charged for residential property?
First-Time Buyer Relief allows eligible individuals purchasing their first home to pay reduced SDLT. As of April 1, 2025, the relief applies as follows:
- 0% SDLT on the first £300,000 of the purchase price.
- 5% SDLT on the portion between £300,001 and £500,000.
If the purchase price exceeds;
£500,000, the relief does not apply, and standard SDLT rates are charged on the entire amount.
Standard SDLT rates for residential properties are as follows:
As of April 1, 2025, the standard SDLT rates for residential properties are:
- 0% on the first £125,000.
- 2% on the portion between £125,001 and £250,000.
- 5% on the portion between £250,001 and £925,000.
- 10% on the portion between £925,001 and £1.5 million.
- 12% on the portion above £1.5 million.
What is first time buyer SDLT relief?
First-Time Buyer Relief allows eligible individuals purchasing their first home to pay reduced SDLT. As of April 1, 2025, the relief applies as follows:
- 0% SDLT on the first £300,000 of the purchase price.
- 5% SDLT on the portion between £300,001 and £500,000.
If the purchase price exceeds £500,000, the relief does not apply, and standard SDLT rates are charged on the entire amount.
What are the rates of SDLT for residential property?
Answer: As of April 1, 2025, the standard SDLT rates for residential properties are:
- 0% on the first £125,000.
- 2% on the portion between **£125,001 **and £250,000.
- 5% on the portion between £250,001 and £925,000.
- **10% **on the portion between £925,001 and £1.5 million.
- 12% on the portion above £1.5 million.
What is the SDLT surcharge for purchasing a second home?
When purchasing an additional residential property in England or Northern Ireland — such as a second home or buy-to-let — you pay higher SDLT rates, which are 5% above the standard residential rates.
As of April 1, 2025, the higher rates are:
- 5% on the portion up to £125,000
- 7% on the portion between £125,001 and £250,000
- **10% **on the portion between **£250,001 **and £925,000
- 15% on the portion between £925,001 and £1.5 million
- 17% on the portion above £1.5 million
Does SDLT include chattels?
No - payable on land only
If sale involves valuable chattels, can save SDLT by apportioning part of purchase to chattels
What is the SDLT rate for non-residential freehold property?
For non-residential (commercial) freehold properties, SDLT is charged as follows:
- 0% on the first £150,000.
- 2% on the portion between £150,001 and £250,000.
- 5% on the portion above £250,000.
How is SDLT paid?
Sending SDLT1 form to HMRC within 14 days of completion
What happens if SDLT is not paid?
Transfer of property to buyer will not be registered by the Land Registry
What are the LTT rates for main residential property purchases?
For main residential property purchases in Wales (as of April 28, 2025):
- 0% on the portion up to £225,000
- 6% on the portion between £225,001 and £400,000
- 7.5% on the portion between £400,001 and £750,000
- 10% on the portion between £750,001 and £1.5 million
- 12% on the portion above £1.5 million
(Note: There is no first-time buyer relief under LTT.)
Is there any relief available for first time buyers in Wales?
No
What are the LTT rates for non-residential property purchases?
For non-residential (commercial) property purchases in Wales:
- 0% on the portion up to £150,000
- 1% on the portion between £150,001 and £250,000
- 5% on the portion between £250,001 and £1 million
- 6% on the portion above £1 million
How is LTT paid?
Land transaction return submitted to Welsh Revenue Authority within 30 days of completion
Who pays Capital Gains Tax in property transaction?
The seller - but usually will be able to benefit from the principle private dwelling house exemption
What is the principle private dwelling house exemption?
A seller of residential property does not have to pay CGT if it is the sale of the dwelling house used as their only or main residence throughout the period of ownership
- If have more than one residence, can choose which one qualifies for the relief
- Relief may be lost on any part of the house used exclusively for business use
- If garden of >0.5 hectares, gain is chargeable unless seller can demonstrate extra garden necessary to reasonable enjoyment of the house
What three questions should be asked when seeing if a seller qualifies for the principle private dwelling house exemption?
(i) Is it the only or main residence throughout the period of ownership?
(ii) Is the garden more than 0.5 hectares?
(iii) Has any part of the house been used exclusively for business use?
What is NPV
+
What are the SDLT rates for non-residential lease rents (based on Net Present Value) in England and Northern Ireland?
(NPV is the total value of all rent payments over the term of the lease, discounted to present value.)
For non-residential leases, Stamp Duty Land Tax (SDLT) on the rent is calculated based on the Net Present Value (NPV) of the lease payments.
The rates are:
- **0% **on NPV up to £150,000
- **1% **on NPV between £150,001 and £5 million
- **2% **on NPV above £5 million
What is VAT?
Tax on ‘taxable supplies’ ie certain goods or services provided by the taxable person in the course of business
What is the difference between output tax & input tax?
Output tax: VAT charged by the supplier on its goods or services (ie. its output)
Input tax: VAT paid by customer receiving the goods or services
Is the sale of a new build residential house by a developer a taxable supply?
Yes, but zero rated
What is the VAT rate for the supply of construction services?
Standard rated (ie. 20%)
What is the VAT rate for the supply of professional services? (eg. architect, surveyor)
Standard rated (ie. 20%)
What is the VAT rate for the sale of a ‘new’ commercial building?
Standard rated (ie. 20%)
‘New’ = less than 3 years old
What is the VAT rate for the sale of an ‘old’ commercial building?
Exempt, subject to option to tax
‘Old’ = more than 3 years old
