stamp duty

follyfoot

can someone please explain when tenants become liable for stampduty?

pcwilkins

Stamp Duty is the tax you pay when you buy property or shares. Unless a tenant is buying property or shares they are not liable to pay any stamp duty.

Peter

Doozergirl

You pay stamp duty when you purchase a house that costs £125,001 or more.

So tenants don't pay stamp duty at all.

wecanhelpu

What's all this about then?

http://www.letlink.co.uk/letting-factsheets/factsheets/factsheet-32---stamp-duty-land-tax-sdlt.html

Hermione54

Well, if you can afford rent of £125000 a year, you can afford the stamp duty! The information is quite clear - hardly anyone except the super rich will ever pay it.

silvercar

Any lease valued at over £125k will attract stamp duty. so a 6 year's rental agreement at £2,000 a month would require a tenant to pay stamp duty just as buying a leasehold flat over £125k would.

There used to be a rule that tenancies undera year were exempt, which is why you see agreements written for a "year less a day".

HelzBelz

Sounds like if you're paying rent of more than £125K over the period of your lease you have to pay 1% tax on the amount over £125K, I think for most peoples leases it wouldn't have any affect

follyfoot

thank you...........

nobblyned

Hermione54 wrote: »

Well, if you can afford rent of £125000 a year, you can afford the stamp duty! The information is quite clear - hardly anyone except the super rich will ever pay it.

But not clear enough for you to spot that it is the total value of the lease over the full period that counts, not the per year rate

In practice though I think you are correct, not many people sign leases for more than a year.

Alan_M_2

This is designed more for commercial leases than domestic, I had this issue on the building I moved into earlier this year and arranged a three year renewable lease to avoid the stamp duty.

Long leases are a thing of the past so it's quite uncommon for these duties to crop up.

Hermione54

But not clear enough for you to spot that it is the total value of the lease over the full period that counts, not the per year rate

I stand corrected, but the basic point remains that ordinary people will not be bothered by this. Interestingly, the same piece of legislation also closed the loophole where no stamp duty was payable if you bought property from the church, eg old vicarages.