The following calculator and commentary is for general interest only and must not be relied on. It may not be up to date or complete, relates only to certain types of residential property in England or Wales and does not constitute advice.
We can often help you to find suitable independent advisers, but you will always ened to take specific advice from your property lawyers, accountants or other financial advisers on tax issues in specific situations.
Do I need to pay stamp duty on non-residential property?
When purchasing non-residential property in England or Wales you are still obliged to pay Stamp Duty Land Tax (SDLT) - a tax levied on property transactions and payable to Inland Revenue - on non-residential assets above the value of £150,000, as it currently stands.
You are required to pay Stamp Duty on non-residential assets whether a freehold, new or existing leasehold property.
Examples of non-residential property
Non-residential property includes all types of commercial property including
- Shops/retail units
- Garages & workshops
- Agricultural land
- Mixed-use property i.e live/work spaces
- Residential property containing more than a certain number of units
How much Stamp Duty will I pay on non-residential property transactions?
Under the current sytem, SDLT rates are based on price thresholds. A percentage is payable only on the portion of a property price which falls within each band.
|Property or lease premium or transfer value||SDLT rate|
|Up to £150,000
|£150,001 to £250,000
|The remaining amount (the portion above £250,001)
If you bought freehold retail space for £320,000 you would pay nothing on the first £150,000, 2% on £150,001 to £250,000 and a further 5% on the amount above £250,001.
£320,000 - £250,000 = £70,000 x 0.05% = £3,500
£250,000 - £150,000 = £100,000 x 0.02% = £2,000
New leasehold sales and transfers
It is worth noting that when you buy a new non-residential or mixed-use leasehold you pay SDLT on both the:
- Purchase price of the lease (the ‘lease premium’) using the rates above
- Value of the annual rent you pay (the ‘net present value’)
These are calculated separately and then added together.
The net present value (NPV) is based on the total rent over the life of the lease. You do not pay SDLT on the rent if the NPV is less than £150,000
|Net present value of rent||SDLT rate|
|£0 to £150,000
|The portion from £150,001 to £5,000,000)
|The portion above £5,000,001
When is commercial stamp duty paid?
When buying a non-residential property over a certain price, stamp duty is payable to the HMRC 30 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don't miss the deadline.
Who pays commercial stamp duty?
Stamp Duty is paid by everyone purchasing a residential or non-residential property in England, Northern Ireland and Wales, including overseas buyers, corporate bodies and non natural persons.
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