Stamp duty land tax (SDLT) is a tax payable on certain transactions in land and property in the UK. In Northern Ireland, the rules and rates of SDLT can be complex and subject to change. Here’s a breakdown of the key points to be aware of in 2024.
Who Pays Stamp Duty in Northern Ireland?
There are different types of property purchases in which the new owner is required to pay stamp duty tax if it is over one of the price thresholds. Those applicable are:
- Buyers of freehold properties – properties which include ownership of the land it is built on.
- Buyers of new or existing leaseholds – properties which will be owned for a length of time agreed with the freeholder, i.e. the lease. Examples can be flats which don’t include ownership of the building they’re in, or a house without the land it sits on.
- Buyers of shared ownership properties – properties which are having a percentage of ownership purchased through a scheme run by an approved public body.
- Recipients of land or property transferred in exchange for payment or non-monetary payment, for example taking on a mortgage. However, SDLT in these cases depends on the circumstances of the transfer.
How Much Stamp Duty Do I Pay?
The amount of SDLT you pay depends on the purchase price of the property. The current rates for residential property purchases in Northern Ireland are as follows:
- £0 – £250,000: 0%
- £251,000 – £925,000: 5%
- £925,000 – £1.5million: 10%
- £1.5million+ 12%
These rates change on the 1st of April.
Important Considerations:
- First-Time Buyers’ Relief: First-time buyers in Northern Ireland may be eligible for relief from SDLT on the first £425,000.00 of the purchase price.
- Additional Dwelling Relief: If you already own a property and are buying a second home, you are liable to pay an extra 5% on top of the current rates.
- Land and Property Transactions: SDLT also applies to other types of land and property transactions, such as commercial property purchases and leases.
- Changes to Legislation: It’s important to note that SDLT rates and rules can change, so it’s advisable to seek professional advice to ensure you’re aware of the latest regulations.
How do I pay stamp duty?
Once you’ve completed your property purchase, you’ll typically have 30 days to pay the SDLT. This can be done through various methods, including online payments, bank transfers, or by cheque. It’s essential to follow the specific instructions provided by HMRC. Late payment can result in penalties, so it’s crucial to adhere to the deadlines. Consulting with a solicitor can help streamline the process and ensure timely payment.
How has stamp duty laws changed since Covid?
During the COVID-19 pandemic, the UK government introduced temporary reductions in Stamp Duty Land Tax (SDLT) to stimulate the housing market. These measures encouraged property transactions and boost economic activity. However, these temporary reliefs have since expired. As of 2024, the SDLT rates have reverted to their pre-pandemic levels. While the current rates offer some relief compared to previous years, it’s important to consult with a solicitor to understand the specific implications for your property transaction.
What is the role of a solicitor in the stamp duty process?
Given the complexities of SDLT, it’s highly recommended to consult with a qualified solicitor. McPartland & Sons Solicitors can provide tailored advice based on your specific circumstances, helping you to minimise your tax liability and navigate the legal processes involved in property transactions.
By understanding the current SDLT laws in Northern Ireland, you can make informed decisions and plan your property purchases effectively.
If you have any questions about stamp duty or require legal assistance with moving house, then get in touch and book a free consultation with one of our conveyancing experts. Click over to our Domestic Conveyancing page to learn how we can help.