Current rules
Currently, overseas non-resident buyers pay the same rate as UK resident buyers. These are as follows:
For a property value of £0 to £125,000 you will pay 3% stamp duty
For a property value of £125,001 to £250,000 you will pay 5% stamp duty
For a property value of £250,001 to £925,000 you will pay 8% stamp duty
For a property value of £925,001 to £1.5m you will pay 13% stamp duty
For a property value of £1.5m and over you will pay 15% stamp duty
Additional 3% higher rate
There is also an additional 3% payable on top of the standard rates if you are buying a second, residential property and not replacing your main residence.
However, if you sell your main residence within three years of purchasing the second home and replace this as your main residence then you can request a refund of the 3% additional rate.
A property is your main residence if you have lived in it at some point in the three years prior to selling the property and this was your only residence, or you lived in it as your main residence.
Similarly, if you are a married couple then if either of you own a second property that is a main residence you are eligible for the higher rate.
If your main residence is abroad and you are buying a further property in the UK you are also liable for the higher rate of 3%.
Also, the 3% additional rate is payable if you are purchasing a buy to let property.
First-time buyers
If you are a first-time buyer you do not pay stamp duty on a home worth less than £300,000.
If the home is worth between £300,000 and £500,000 then you pay no stamp duty on the first £300,000 and 5% on the remaining property value between £300,000 to £500,000.
If a property is worth more than £500,000 then the standard stamp duty amounts are payable.
New rate for non-residents
From April 2021 a new rate of 2% has been introduced for overseas non-resident buyers of residential property in England and Northern Ireland. This includes companies, individuals and expats.
This is payable in addition to the standard stamp duty payable on the property. However, if the buyer becomes a UK resident after their purchase then they may be able to receive a refund on this additional 2%.
It is very important to seek expert tax advice when purchasing a property.
Hanne & Co has an experienced Property Team of both residential and commercial property conveyancers and solicitors who would be happy to help with your commercial or residential property needs. Contact them on 020 7228 0017.
Marie-Claire Long is a Trainee Solicitor in Hanne & Co’s Property Department
