Land tax accelerated

Stamp Duty Land Tax (SDLT) is payable when you buy land or property in England or Northern Ireland. Buyers of property in Scotland pay Land and Buildings Transaction Tax (LBTT) and, for purchases in Wales, Land Transaction Tax (LTT) is due.

Until recently all of these taxes were payable within 30 days of the completion date, but the deadline for SDLT has been halved to 14 calendar days from 1 March 2019. This is also the period for submitting the land transaction return which reports the SDLT payable.

When a company buys a residential property for over £40,000 it must pay an additional 3% SDLT on the entire value. This supplementary rate also applies if you buy a second home. If the property is not defined as ‘residential’ it is a commercial property and the extra 3% tax doesn’t apply.

A derelict property which is in such a poor state that it’s not suitable to be lived in when purchased can’t be treated as a residential property for the purposes of SDLT. If you buy a derelict home to develop, you shouldn’t have to pay the additional 3% rate of SDLT on that purchase.

This ‘not fit to live in’ rule should also apply for purchases subject to LBTT and LTT in Scotland or Wales, as those taxes have similar supplementary rates for purchases of second homes. However, the additional rate of LBTT increased from 3% to 4% on 25 January 2019.