transfer of mortgage stamp duty

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What Is a Stamp Duty?

Understanding a stamp duty.

• History of Stamp Duties in the U.S.

What is a transfer tax?

Are stamp taxes tax deductible, are tax stamps collectible.

• Government & Policy

Stamp Duty: Meaning, History in the U.S., FAQs

A stamp duty is a tax that governments place on legal documents, usually involving the transfer of real estate or other assets. Governments can impose stamp duties, also known as stamp taxes, on documents that are needed to legally record those types of transactions, as well as on documents recording marriages, military commissions, copyrights, patents, and so forth.

Historically, governments have used stamp taxes as a way to raise money to fund their activities. Stamp duties are thought to have originated in Spain in the early 17th century. They were called “stamp” duties because a physical stamp was put on the document as proof that it had been officially recorded and the tax liability had been paid.

Key Takeaways

• A stamp duty—also known as a stamp tax or documentary stamp tax—is a tax that a government levies on documents that are required to legally record certain types of transactions.
• Governments have imposed stamp duties on a variety of documents, including those related to the sale or transfer of real estate, patents, securities, and copyrights.
• Governments use these taxes as a source of revenue to fund government programs and activities. In some cases, they are referred to as revenue stamps.

The stamp duty is also known as a documentary stamp tax. Governments around the world levy these taxes on a variety of legally recorded documents.

Before income and consumption taxes provided governments with a substantial tax base, they raised revenue primarily through property taxes , import duties , and stamp duties on financial transactions. 

As income and consumption have grown, it might have made sense to do away with stamp duties. So why do we still have them in many places? Simply put, they provide a steady stream of income for governments.

Today, however, stamp duties apply to far less than the broad category of “financial transactions.” They do remain on properties, though. They are often levied when real estate is transferred or sold; additionally, many states impose taxes on mortgages and other instruments securing loans against real estate.

While the United States once imposed stamp taxes on a variety of transactional documents, there is no federal stamp tax today, except in very limited circumstances. One is a tax on the transfer of certain firearms and accessories that are subject to the National Firearms Act.

The U.S. Fish and Wildlife Service also requires waterfowl hunters age 16 or older to purchase Federal Duck Stamps, which serve as both a hunting license and a free pass for any national wildlife refuge that otherwise charges an entry fee. The agency says that “nearly all of the proceeds are used to conserve habitat for birds and other wildlife, birders, nature photographers, and other outdoor enthusiasts.” Some states also issue their own versions of duck stamps for similar conservation purposes.

Otherwise, only state and local governments currently impose stamp taxes in the United States. In addition to various legal documents, “48 states and the District of Columbia, Guam, and Puerto Rico currently require a tax stamp affixed to tobacco products,” according to the Centers for Disease Control and Prevention.

History of Stamp Duties in the United States

By the 17th century, governments had introduced stamp duties throughout Europe. Over the next century, they became a common form of taxation in the Netherlands, France, Denmark, Prussia, and England. 

In 1765, the British parliament passed a stamp tax to be imposed on American colonists, requiring them to pay tax on all printed papers, such as licenses, newspapers, ships’ papers, and even playing cards. The British government said the funds collected from stamp duties were needed to pay for positioning troops in certain locations of America and to pay for the massive war debt it had incurred during the Seven Years’ War.

American colonists were outraged by the imposition of the taxes, which they believed were a deliberate attempt by Britain to control commerce and curtail colonial independence. The Stamp Tax was enacted without the knowledge of or input from the colonies, becoming a prime example of taxation without representation . The Stamp Act led to the first concentrated effort by the colonists to resist British authority and became a milestone event leading up to the American Revolution.

Stamp taxes have endured much longer in Britain itself. Today, the United Kingdom imposes a stamp duty land tax (SDLT) on home purchases, although homes under a certain value are not subject to it. For example, the current threshold for residential properties is £125,000. However, first-time homebuyers get a break—their threshold is £500,000.

A transfer tax is a type of stamp tax that some state and local governments impose when the deed or title to a home or other property changes hands. It is often included in the long list of closing costs .

Not directly, although the law does offer a tax break on some of them. As the Internal Revenue Service (IRS) explains, in the case of home purchases, “You can’t deduct transfer taxes and similar taxes and charges on the sale of a personal home. If you are the buyer and you pay them, include them in the cost basis of the property. If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale.”

Yes, some postage stamp collectors also collect tax stamps, often referred to in the hobby as “revenue stamps.”

The Bottom Line

A stamp duty, also known as a stamp tax, is a tax imposed on certain transactions, typically by state or local governments. In many cases, a stamp duty will represent a charge for recording the transfer of real estate or other assets from seller to buyer, but it can also be levied on other types of documents and even some products, such as cigarettes. Stamp taxes were a major factor leading to the American Revolution.

Library of Congress. “ United States Code: Machine Guns, Destructive Devices, and Certain Other Firearms, 26 U.S.C. §§ 5801–5872 (Suppl. 5 1964). ”

PwC, Worldwide Tax Summaries. “ United States: Corporate—Other Taxes .”

U.S. Fish and Wildlife Service. “ Duck Stamps .”

U.S. Centers for Disease Control and Prevention. “ STATE System Tax Stamp Fact Sheet .”

Gilder Lehrman Institute of American History. “ The Stamp Act, 1765 .”

Gov.UK. “ Stamp Duty Land Tax .”

Internal Revenue Service. “ Publication 530: Tax Information for Homeowners ,” Page 4.

Linn’s Stamp News. “ Revenue Stamps Pay Tax Instead of Postage .”

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• Stamp duty and other tax on property

Stamp Duty Land Tax: transfer ownership of land or property

Find out if you have to pay Stamp Duty Land Tax (SDLT) on transfers of land or property depending on type of transfer, your marital status and other factors.

The following guidance includes calculations.

You do not pay Stamp Duty Land Tax if you buy a property in:

• Scotland from 1 April 2015 — you pay Land and Buildings Transaction Tax
• Wales from 1 April 2018 — you pay Land Transaction Tax ( LTT )

You may need to pay Stamp Duty Land Tax when all or part of an interest in land or property is transferred to you and you give anything of monetary value in exchange.

Anything of monetary value that you give in exchange is called the ‘chargeable consideration’ .

The rules you use to work out how much Stamp Duty Land Tax you pay depend on the circumstances of the property transfer.

If you marry, enter into a civil partnership or set up home together

You might pay Stamp Duty Land Tax when you transfer a share in a property to a spouse or partner when you do one of the following:

• enter into a civil partnership
• move in together

You pay Stamp Duty Land Tax if the chargeable consideration given in exchange for the share transfer is more than the current Stamp Duty Land Tax threshold for the property type.

An example of when you pay Stamp Duty Land Tax when no money changes hands

The owner of a property valued at £700,000, with an outstanding mortgage of £600,000, transfers half the property to their partner when they marry in October 2022. Their partner takes on 50% of the mortgage (£300,000).

HMRC charge Stamp Duty Land Tax on the amount paid for a property or the amount of ‘chargeable consideration’ given.

By taking liability for the mortgage, the owner’s partner has given ‘chargeable consideration’ of £300,000 for their share of the property, which is £2,500 Stamp Duty Land Tax (0% of £250,000 + 5% of £50,000).

An example of when you do not pay Stamp Duty Land Tax

A house has a value of £180,000. The owner of the property has equity of £90,000 and an outstanding mortgage of £90,000. The owner transfers a half share of the property to their partner.

Their partner:

• pays cash for half of the equity — £45,000
• takes responsibility for 50% of the outstanding mortgage — £45,000

So the chargeable consideration for Stamp Duty Land Tax is £90,000, made up of the:

• cash payment
• 50% share of the outstanding mortgage

£90,000 is below the current Stamp Duty Land Tax threshold so there’s no tax to pay. You must still tell HMRC about the transaction on an Stamp Duty Land Tax return .

If the transfer is a gift

If the transfer is a gift and there’s no chargeable consideration, Stamp Duty Land Tax does not normally apply. Read ‘if you’re given property as a gift’ section for more information about when Stamp Duty Land Tax is payable.

If you transfer property because of divorce, separation or the end of a civil partnership

You do not pay Stamp Duty Land Tax if you transfer an interest in land or property to your partner as part of an agreement or court order because you’re either:

• dissolving a civil partnership

This also applies if the partners either:

• annul their marriage
• legally separate

In these cases there’s no need to tell HMRC about the transfer, even if the value is more than the Stamp Duty Land Tax threshold.

If you transfer or divide up jointly-owned property or land: unmarried couples and other joint owners

If joint owners are unmarried and not in a civil partnership when they transfer an interest in land or property from one joint owner to another then you may have to pay Stamp Duty Land Tax.

You do not pay Stamp Duty Land Tax if 2 or more people jointly own property (as joint tenants or tenants in common) and you divide it physically and equally and own each part separately.

If you or another person takes a bigger share, or all of the other’s share, and pay cash or some other chargeable consideration in exchange, you must tell HMRC by filling in a Stamp Duty Land Tax return .

If the amount you pay is more than the current threshold, you’ll pay Stamp Duty Land Tax on it. Read ‘an example of when Stamp Duty Land Tax may be payable’ for more information.

If someone takes on a larger share of jointly owned property

When a property is jointly owned, if you split the property equally Stamp Duty Land Tax is not payable.

If one person takes on a larger share, they may need to pay Stamp Duty Land Tax.

An example of when Stamp Duty Land Tax may be payable

Two people own a farm jointly in equal shares. It’s valued at £2 million. They split the ownership of the farm geographically and each takes 50% of the land.

If the value of each half of the land is the same, then no Stamp Duty Land Tax is due.

But in this example the land taken by person 1 includes the farmhouse and farm buildings. This owner’s land is worth £500,000 more than the land that the other owner, person 2, takes. The shares are:

person 1 — £1,250,000

person 2 — £750,000

Person 1 compensates person 2 and pays them £250,000.

Stamp Duty Land Tax is payable on this £250,000 because it’s more than the current threshold.

If you take a larger share as a gift

If you take a bigger share but do not pay anything in return, there’s no ‘chargeable consideration’ given including taking on liability for a mortgage. You will not pay Stamp Duty Land Tax, even if the value of the extra part of the share is more than the Stamp Duty Land Tax threshold . You do not need to tell HMRC about the transaction.

If you transfer the outstanding mortgage

Joint owners (this may include unmarried couples who are splitting up) may agree that just one of them will take over ownership of a property they bought together, including any outstanding mortgage.

In this case the person taking ownership will pay Stamp Duty Land Tax on the total chargeable consideration of either or both of the following, if it exceeds the Stamp Duty Land Tax threshold :

• any cash payment that one of the couple makes to the other for their share
• the proportion of the outstanding mortgage that belongs to the share of the property being transferred

An example of when you pay Stamp Duty Land Tax when you transfer ownership

Two people own a house equally together and:

• it’s valued at £550,000
• they have equity in the property of £350,000
• they have an outstanding mortgage of £200,000

In October 2022, they transfer ownership so that one of them will have sole ownership of the property. The new sole owner:

• pays cash for half of the equity — £175,000
• becomes responsible for the other person’s half of the outstanding mortgage — £100,000

The chargeable consideration for Stamp Duty Land Tax is £275,000, made up of the:

The new sole owner pays £1,250 Stamp Duty Land Tax (0% of £250,000 + 5% of £25,000) and must tell HMRC by filling in a Stamp Duty Land Tax return .

If the transfer occurred before 23 September 2020, different thresholds and rates of Stamp Duty Land Tax are applied .

If you get land or property as a gift or from a will

If you’re left land or property in a will.

If you get land or property under the terms of a will, there’s no need to tell HMRC and you will not pay Stamp Duty Land Tax. This applies even if you take on an outstanding mortgage on the property on the date the person died. This is on condition that no other chargeable consideration is given.

If you’re given property as a gift

If you get property as a gift you’ll not pay Stamp Duty Land Tax as long as there’s no outstanding mortgage on it.

You’ll pay Stamp Duty Land Tax if you take over some or all of an existing mortgage and the value of the mortgage is over the Stamp Duty Land Tax threshold .

An example of when Stamp Duty Land Tax is payable if you’re given property as a gift

The owner of a property decides to transfer half of their share to their spouse. The owner does not take a cash payment for this share, but there’s an outstanding mortgage on the property.

Their spouse takes on the responsibility of 50% of the outstanding mortgage. If the amount outstanding that their spouse takes on is more than the current threshold, Stamp Duty Land Tax is payable.

HMRC must be told about the transaction by filling in a Stamp Duty Land Tax return .

If you transfer land or property to or from a company

When property is transferred to a company, Stamp Duty Land Tax may be payable on its market value, not the chargeable consideration given. For example, if a property has a market value of £300,000 but the company only pays a chargeable consideration of £150,000, Stamp Duty Land Tax will still be payable on £300,000.

This applies in either of the following situations, the:

• person who transfers the property is ‘connected’ with the company — the definition of a connected person covers relatives and people who’ve some involvement with the company
• company pays for the property with shares in the company (partly or wholly) to the person making the transfer, where that person is connected to the company (but not necessarily the acquiring company)

You may pay a higher rate of Stamp Duty Land Tax on purchases of additional residential properties .

The examples of when you pay Stamp Duty Land Tax when no money changes hands, when you transfer ownership and when you transfer land or property to or from a company have been updated to align with the nil-band threshold rate change on 23 September 2022.

The example under the 'If you're given property as a gift' section has been updated to make it more accurate.

Example 2 has been updated as the SDLT holiday rates ended on 30 September 2021.

Purchase deadlines extended for reduced rates for Stamp duty Land Tax.

The government has temporarily increased the nil rate bands of residential Stamp Duty Land Tax from £125,000 to £500,000.

From 1 April 2018 SDLT will no longer apply in Wales. You'll pay Land Transaction Tax which is dealt with by the Welsh Revenue Authority.

First published.

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Conveyancing Solicitors and Property Surveyors / Transfer of equity guide

Transfer of equity guide

What is a transfer of equity, why do people transfer equity, what are the types of property transfer when transferring equity.

• Do I need a conveyancer for transfer of equity?
• How does transfer of equity work
• What is the process for transfer of equity?

How much does transfer of equity cost?

What information will a transfer of equity quote provide.

• Does having a mortgage effect the cost of transferring equity?
• Is there a stamp duty cost when transferring equity?

How long does a transfer of equity take?

Transfer of equity is when a person is added or removed from the title deeds of a property. This means that a person is either no longer the owner of the property or becomes a part owner of the property. At least one of the original owners must remain on the title deeds. Considerations such as, if there is a mortgage or if there is equity within the property are considered.

Below we have detailed the full transfer of equity process step by step, For more information we have provided detailed explainer videos for each step.  

Conveyancing Process for a Transfer of Equity Explainer Videos:

There are several reasons why people will require a transfer of equity, most commonly due to a change in personal circumstances. For example:

• Adding a new partner to the deeds of the house
• Due to divorce or separation, where one partner will remain in the property and ownership is transferred to that person
• Buying out or adding joint owner/s
• As a gift, where a parent, for example, adds a child to their property deeds or gifts their property

There are two types of property transfers, and it is important to be clear which it is you are undertaking as it will impact the administration of the transfer.

Full transfer of ownership

A full transfer of ownership is when you transfer the full ownership of the property to another person or are removing a person completely. An example is if you are gifting the property to another person such as a family member or if you are divorcing and need to remove a partner from the ownership of the property.

Part transfer of ownership

Part transfer is where you add another person to the deeds or remove part of their share on the deeds. For example, you may be the sole owner of a property and wish to add a new partner to the deeds of the property so you both become joint owners. The number of shares that can be transferred can vary.

Do I need a conveyancer for a transfer of equity?

A conveyancer is an important requirement when transferring equity, as they will be responsible for ensuring that all the legal requirements are met for your circumstances. The personal situation of those involved and the reasons for undertaking a transfer of equity can make the legal process quite involved, so instructing an experienced conveyancer is important to ensure a smooth transaction and that you receive the right legal advice.

How does transfer of equity work?

The transfer of equity process typically involves the preparation and execution of a legal document known as a “deed of transfer” which outlines the terms of the transfer, and the payment of any stamp duty and legal fees. The process is usually handled by solicitors, who will ensure that all necessary steps are taken to legally effect the transfer of ownership.

What is the process for a transfer of equity?

There are many variables to consider when transferring equity such as, if there is any outstanding mortgage, if you are gifting the property to a spouse, a child or civil partner, if you are buying out one or more joint owners, if there is a refusal on the part of one the parties to move forward with the transfer.

Below is an overview of the key steps involved:

Step 1: Consider the mortgage situation and seek financial advice

The mortgage situation of those involved can affect the steps required and so this needs to be understood and financial advice sought. For example, if a person is being added to the property's ownership and there is a mortgage on the property, then the mortgage lender will need to carry out their own checks to ensure the person(s) is/are suitable. It may also be the case that a new mortgage is required as changing a property's ownership will affect the equity and the terms of the current mortgage.

Step 2: Instruct a conveyancer

It is necessary to instruct a conveyancer to take care of the legal aspect of the transfer. Where a person is being added to the deeds then both parties can use the same conveyancer. However, if someone is being removed, then both parties will need to have their own legal representation.

Step 3: Conveyancer obtains the title deeds

The conveyancing solicitor will obtain an official copy of the title deeds for the property. They will also do background checks for a mortgage and any other restrictions on the property. They will also check the identities of each party. If the person being removed from the title deeds is to be paid, the conveyancer will also have to confirm the source of funds to be used.

Step 4: Conveyancer prepares the transfer documents

The conveyancing solicitor will compile the transfer deed document and prepare this ready to be signed. The form is filled out by the person staying in the property. It is sent on to the person whose name will be removed.

Step 5: Notifying of third parties

For the transfer to be completed, any third party involved in the property, such as a mortgage lender, bank or building society, will need to provide their written consent. If the property is being transferred subject to the current mortgage, the lender will need to be a party to the transfer deed.

Step 6: Signing of the deed

Once the conveyancer has prepared the mortgage deed to sign, they will then co-ordinate the transfer of any funds between parties. Outgoing parties will need to complete and sign the relevant form, in the presence of their conveyancer.

Step 7: Notifying the Land Registry

The details of the deed transfer will be submitted to the Land Registry, for which a fee is charged. The fee varies depending on the value of the property.

Step 8: Settlement of stamp duty

The conveyancer will calculate any stamp duty liable to HMRC and facilitate payment of it.

The two main costs associated with any transfer of equity are the legal fees of the solicitor and the Land Registry fee you must pay when notifying the Land Registry of the new deed. A Conveyancing Solicitor will likely charge between  £100 and  £500 + VAT. There will also be other charges including online ID checks, and the official copy of the Register of Title from the Land Registry.

The cost of a transfer of equity will vary on the circumstances and the value of the property. It will also vary depending on whether you are adding, removing or replacing someone on the deeds. if the property is leasehold or freehold and the situation of any mortgages on the property

A transfer of equity quote will give you a clear breakdown of the legal, disbursement and third-party costs you can expect to pay for your transfer of equity situation. It is important to speak to a conveyancer and discuss the quotation with them so any changes can be made that may affect the cost.

Does having a mortgage affect the cost of transferring equity?

If there is a mortgage on the property, there may be charges payable to your lender, sometimes known as a 'change of parties' fee. This covers the lender's administrative costs of adding or removing someone from a mortgage.     

Before the transfer goes ahead, a current or new lender may also require a local authority search to confirm the condition of the house. Alternatively, they may require you take out a Local Authority search indemnity insurance which will protect them if the condition of the property has changed. There will be costs associated with this.

How much does stamp duty cost when transferring equity?

During a transfer of equity, you will be taking on a certain percentage of the equity in a house and you may also be taking on part of any mortgage. Stamp duty may be applicable depending on what price band the transaction falls in.

The transfer of equity process usually takes 3-6 weeks to complete, but timescales will vary, depending on a person's circumstances. For example:

• If there is no mortgage lender involved, the process is more straightforward and so the timescale will be shorter
• If there is an existing mortgage in place, the process will typically take longer as you will need to wait until you have written consent from your lender. The lender will also need to investigate the eligibility of the new owner/s.
• If you are remortgaging, consent from your existing lender is not required. However, the remortgage will need to be applied for during the transaction which can take time.
• If the property is leasehold, your conveyancing solicitor will need to obtain the appropriate consents from your landlord or freeholder.

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Transfer of Equity Stamp Duty

Do I Pay Stamp Duty Land Tax When Transferring Property into My Partner’s Name?

When it comes to property transfers, Stamp Duty Land Tax (SDLT) can catch you out. The basic rule is that married couples and civil partners are NOT exempt from SDLT if they transfer ownership to each other, although they may not have to pay the second-home rate. There are exemptions if you are divorcing or legally separating , however.

What is a matrimonial property transfer?

It’s common for married couples and civil partners to transfer the beneficial ownership of property to each other. They may do this for tax reasons, for example, to take advantage of capital gains tax reliefs, or as part of their estate planning to ensure the property can be left to children or other family members when one partner dies.

The transfer could also form part of an informal agreement, for example, to change the ownership shares if one partner is paying off the mortgage and wants to get some equity in return .

Is SDLT payable on matrimonial transfers?

Even though you may have paid SDLT in full when you purchased the property, there could be a second charge to SDLT when you transfer whole or part ownership to your spouse. This is the case even if no cash is changing hands.

Stamp Duty Land Tax is payable on the “consideration” for the transaction. This usually is the purchase price, although it is unlikely that spouses will pay money as they tend to gift matrimonial property to each other. However, consideration also includes a mortgage or personal debt that someone takes on. To work out the consideration, you add the money being paid for the share of the property being transferred and the new owner’s share of the mortgage debt.

If the total exceeds the stamp duty threshold, which currently is £250,000 for your main residential property, then SDLT is payable at the prevailing rate.

Here’s an example:

Simon owns a property valued at £500,000 with a £350,000 mortgage. He transfers the legal title to his wife, Sarah. Sarah owns 80% of the beneficial interest and Simon owns 20%. Sarah doesn’t pay any money for the transfer, but she does take on 80% of the mortgage. SDLT is payable on the consideration, which is 80% of the existing debt of £350,000. This equates to £280,000.

If this transaction involved Simon and Sarah’s only home, then SDLT would be payable at 5%, which is the rate applicable to transactions with a consideration between £250,001 and £925,000. Sarah would have to pay SDLT of £1,500 (5% of £30,000).

If the transaction involved a buy-to-let or a second home, then the SDLT bill would also be £1,500 as long as Simon and Sarah were living together at the time of the transfer. Usually, there’s a 3% SDLT surcharge payable on second properties, but this is disregarded for transfers between cohabiting spouses or civil partners.

If Simon and Sarah were separated, the transaction would count as a higher-rate transaction. SDLT would be payable at 8%, for a bill of £2,400.

Is it possible to avoid or reduce SDLT on matrimonial transfers?

Yes – you don’t pay SDLT on the transfer of property between spouses or civil partners if it’s done:

• As part of a formal, written divorce or separation agreement signed by both of you, or
• Following a court order because you’re divorcing or dissolving a civil partnership.

It’s very important for couples who are separating to take legal advice to ensure that they do not incur an unexpected bill for SDLT. If Simon and Sarah had asked a solicitor to write a formal separation agreement, for example, they could have avoided the SDLT bill entirely as the transfer of property between them would be exempt.

Where the property is being transferred for reasons other than a separation, such as estate planning or to access capital gains tax reliefs, you might be able to reduce the SDLT bill if you structure the transfer carefully. The SDLT rules are becoming increasingly complex. It’s important to get professional support to ensure that you’re not paying SDLT which could have been avoided with the right advice.

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Will I need to pay stamp duty when I remortgage?

Lots of homeowners choose to remortgage, whether it’s to move to a new property, release equity from their home or to benefit from a mortgage on their current property with a better interest rate or more suitable features. If you’re considering remortgaging for any reason, you might be wondering if there will be any extra fees to consider. For example, you may be asking, ‘is stamp duty payable on a remortgage?’. The answer depends on several factors.

The main factor is whether you are remortgaging when moving house and buying a new property, or whether you are switching to a different mortgage on your current home. If you are buying a new property or piece of land, you will likely need to pay stamp duty. However, this is not always the case.

In this article, we will look at stamp duty in more detail and whether you will need to add this cost into your remortgaging process.

What is stamp duty?

Stamp duty, officially called Stamp Duty Land Tax (or SDLT), is a tax paid when you buy property or land over a certain price. The amount you pay is worked out according to the purchase price of the property or land and how far above the threshold it is valued at. You will pay a percentage of the amount the property or land is above the threshold. So, for example, if your new property is £20,000 above the threshold, you would pay stamp duty on that £20,000.

Recently, there has been a stamp duty holiday, which has meant the threshold above which you have to pay stamp duty has changed over the past year. The scheme is coming to an end now and being phased out but it may still affect your remortgage. For more information on the stamp duty holiday and whether this will impact you, read our latest article about it here. Or, to find out how much you will pay in stamp duty, use our online stamp duty calculator .

Who pays stamp duty?

The majority of buyers in the UK have to pay stamp duty on a house or land they purchase if it is valued over the threshold set by the government. From 1st October 2021, the threshold is £125,000. For first-time buyers, the threshold is £300,000. You do not have to pay stamp duty if you purchase a property below the value of the threshold. The recent stamp duty holiday that temporarily raised the level of this threshold for non-first-time buyers is being phased out, speak to your adviser to find out more. The majority of first-time buyers also do not have to pay stamp duty because the threshold at which they have to pay the tax is higher than previous homeowners; however, if you are remortgaging, you won’t come under the category of first-time buyer.

Do contractors need to pay stamp duty?

Contractors do have to pay stamp duty if they are buying a property above the value threshold and are not first-time buyers. There are no exemptions based on your profession and the threshold for paying stamp duty depends on the value of the property or land, not on the circumstances of the buyer.

What is remortgaging?

Remortgaging is a process many homeowners choose to go through, either when moving house or to change their mortgage product, for example, if they’ve come to the end of their initial, fixed term. You might choose to remortgage if you feel you can find a better mortgage product than your existing loan, for example, if another lender is offering a lower interest rate. Alternatively, you might be interested in remortgaging because you’re hoping to release equity from your home to use for renovations, holidays or retirement. However, before deciding to remortgage with another lender, it’s a good idea to speak to an experienced mortgage adviser to see what options are out there and find the best one for your situation.

You don’t necessarily have to remortgage if you are moving house. Some lenders will let you ‘port’ or move your mortgage to the next property.

Is stamp duty payable on a remortgage?

Whether you have to pay stamp duty when remortgaging depends on whether you are also purchasing a property as part of the process.

Are you moving house?

If you are buying a new property and remortgaging in the process, you will have to pay stamp duty if your new property has a value higher than the threshold. The amount you pay depends on the value of the property or land you’re purchasing, but it is usually a percentage of the amount over the threshold. It can cost thousands, so it’s important to factor this cost in when considering your move.

Are you staying put?

If you are remortgaging without buying a new home, and are simply switching to a new mortgage on your current property, you won’t have to pay stamp duty. This is because stamp duty is a tax you only pay when you purchase a new property or piece of land. So, if you’re staying put, you don’t have to worry.

You might be looking to remortgage because you want to release some equity from your home to use for retirement, supporting your children financially or renovate your house. Alternatively, many homeowners choose to remortgage when they come to the end of their fixed term to avoid moving across to their lender’s Standard Variable Rate (SVR), which is usually much higher than the interest rate you pay during the initial term. Some homeowners may not even wait until the end of this term, opting to remortgage if there is a mortgage product more suitable to their needs.

We hope that after reading our article, you now have a clear answer to the question ‘is stamp duty payable on a remortgage?’, but if you’d like to discuss the matter more, please don’t hesitate to get in touch with one of our advisers .

As a mortgage is secured against your home/property it may be repossessed if you do not keep up with the mortgage repayments.

Stamp Duty Land Tax: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

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• Conveyancing
• Transfer of Equity FAQs

Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?

By Chris Salmon , Updated: Sep 25, 2023 25/09/23

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Depending on the circumstances, Stamp Duty Land Tax (SDLT) may be payable when transferring equity in a property or land. We explain when SDLT will be payable and and how it is calculated .

Calculate Stamp Duty on your transfer of equity

Transfer of equity stamp duty land tax (sdlt) calculator, in this article:, what is a transfer of equity.

A 'transfer of equity' is when an existing owner of a property (or land) adds or removes one or more people to the title (ownership) of the property, or transfers full ownership of the property to another person.

You might transfer equity when:

• Selling your share in a property
• Buying out an ex-partner
• Buying out a joint owner
• Adding a new partner or spouse to the title of your property
• Gifting a property (or share in a property) to a child
• Inheritance Tax (IHT) planning

Get a transfer of equity conveyancing quote

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is a tax payable to HMRC on property and land purchases.

Unless you are an eligible first-time buyer, you pay SDLT when you buy a residential property in England or Northern Ireland for more than the current threshold of £250,000.

Depending on the circumstances, SDLT may also be payable when transferring equity in a property or land , from one person to another.

(In Scotland, you pay Land and Buildings Transaction Tax (LBTT), and in Wales you pay Land Transaction Tax (LTT).)

Is the Stamp Duty threshold the same on a transfer of equity?

Yes. SDLT will only be payable if the chargeable consideration exceeds £250,000 .

If the equity being transferred is in a second property (e.g. a second home, a buy-to-let or a holiday let), the SDLT threshold is £40,000.

How is SDLT calculated on a transfer of equity?

Chargeable consideration.

When transferring equity held in property or land, SDLT is payable on the ' chargeable consideration '.

When purchasing a property outright, chargeable consideration is the purchase price of the property.

When transferring equity , however, chargeable consideration is calculated as follows:

The amount of debt transferred or taken on (the mortgage)

The amount being paid for the equity.

David owns a property worth £600,000. David and Sheila get married and David transfers equity in his property to Sheila.

In Example 1 in the table below, there is no mortgage and David gifts 50% of his equity to Sheila.

In Example 2 , David gifts 50% of his equity to Sheila, but there is a mortgage of £200,000.

In Example 3 , Sheila pays £200,000 for 50% of David's equity and there is a mortgage of £200,000.

Chargeable consideration would be calculated as follows:

How much Stamp Duty will I have to pay on a transfer of equity?

The current SDLT rates are:

*If equity is being transferred in a buy-to-let or second property, an additional 3% stamp duty must be paid on all the relevant bands if the chargeable consideration is more than £40,000.

In what circumstances is Stamp Duty payable on a transfer of equity?

Whenever equity is transferred from one person to another and the chargeable consideration exceeds the threshold, SDLT will be payable. This applies even if the person receiving the equity already owns a share in the property.

However, there are special circumstances where SDLT may be considered differently:

Gifting a property

If you gift a property (or share in a property) to a child, spouse, civil partner or other family member and there is no chargeable consideration, SDLT should not be payable .

You are left a property in a will

If you receive a property (or share in a property) in a will, and no payment is being made for the share, there is usually no SDLT to pay .

There will be no SDLT to pay, even if you took over the mortgage from the date the person died.

Getting married, entering into a civil partnership or moving in together

SDLT may be payable if you transfer equity to a spouse, civil partner or partner and the chargeable consideration exceeds the SDLT threshold.

Divorcing/dissolving civil partnership

If you receive a property (or share in a property) as part of a court order or agreement because you are divorcing, dissolving a civil partnership, legally separating or annulling a marriage, there is usually no SDLT to pay .

Separating from a partner (not married or in a civil partnership)

If you are transferring equity when separating from a partner and you are not married or in a civil partnership, SDLT is payable on the chargeable consideration .

How we can help you

Whether you are gifting a property to a child, getting married or separating, or transferring equity for any other reason, our solicitor panel can help make the process as straightforward and stress-free as possible.

If you are also planning to remortgage as part of the transfer process, the remortgage legal work can be completed at the same time as your transfer of equity.

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Call FREE 0800 612 0377 or arrange a callback

Quittance Legal Services does not provide tax or accounting advice. This article is provided for informational purposes only and should not be relied on for, tax or accounting advice. You should consult with your own tax and accounting advisors.

Sce: https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property

Author: Chris Salmon, Director

About the author

Chris Salmon is a co-founder and Director of Quittance Legal Services. Chris has played key roles in the shaping and scaling of a number of legal services brands and is a regular commentator in the legal press.

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How do i transfer equity in a property with a mortgage.

Transferring equity in a property is straightforward. If there is a mortgage, however, things get more complicated. Here's what you need to know.

Can I do a DIY transfer of equity in my property?

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Everything you need to know about transferring equity in a second home. Read our easy-to-follow guide.

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Is stamp duty payable if I “buy out” my ex partner?

When a couple divorce or separate, you may agree that a jointly owned property will be transferred into the sole name of one of you. This process is called a Transfer of Equity . If there is a mortgage on the property, you must first check with your mortgage provider that they agree to a Transfer of Equity . Many people are not aware that stamp duty may be payable in a Transfer of Equity transaction and do not take this into consideration when deciding what is to happen with a jointly owned property.

Transfer of Equity

When a married couple get divorced, or when civil partners dissolve the partnership, stamp duty land tax (SDLT) is not normally payable in a Transfer of Equity . This is because stamp duty isn’t payable if property is transferred to one or other of the couple as part of an agreement or court order which is part of divorce or dissolution proceedings. However, if no formal agreement or court order is obtained, stamp duty may be payable.

The situation is different for unmarried couples who own property together. If you agree that one of you will take over ownership of a property you bought together, including any outstanding mortgage on the property, stamp duty is payable by the person taking over ownership. The amount of stamp duty they will have to pay will be based on any cash payment that the person taking over ownership makes to the other for their share of the property and the proportion of the outstanding mortgage that belongs to the share of the property being transferred.

If you would like advice about stamp duty and transferring ownership of a property upon separation, whether you are married or unmarried, please contact our enquiries team on 01473 229 200.

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What is a remortgage?

Our residential property and conveyancing solicitors explain the process of remortgaging your property.

Why do you need to instruct a solicitor to remortgage a house?

Is stamp duty land tax payable when i remortgage, can i remortgage even if i have a second mortgage on my property, what happens upon completion, how do i receive any surplus funds on completion.

A remortgage is when you change mortgage lender by paying off one mortgage lender with the proceeds from a new mortgage, normally secured against the same property. They are often arranged to take advantage of mortgage terms more suitable to your current needs.

Lenders need to instruct solicitors in order to ensure that their mortgage conditions are satisfied and that the security provided by your home is suitable for the new mortgage. Solicitors will also need to attend to the redemption of the existing mortgage and registration of the new mortgage at the Land Registry. At Tees we have a specialist team of experienced property lawyers who are members of the  Law Society's Conveyancing quality scheme.   We will ensure that your remortgage is processed as quickly as possible so that you can start to enjoy the benefits of your new mortgage.

No. Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction.

If the second mortgage is not repaid at the same time as the first mortgage, the second mortgage lender will normally need to agree to the new mortgage and the mortgage lenders will then need to agree whose mortgage has priority.

On the day of completion, we will receive the mortgage advance from your new lender. We will then pay off your existing mortgage and forward to you any surplus funds due to you.

We will send any surplus funds due to you on completion by direct bank transfer or cheque, whichever you prefer.

If you are looking to remortgage your property , please do not hesitate to get in touch.   Our specialist lawyers are  based in:

Cambridgeshire :  Cambridge Essex :  Brentwood ,  Chelmsford , and  Saffron Walden Hertfordshire :  Bishop's Stortford  and  Royston

But we can help you wherever you are in England and Wales.

Call our specialist residential property solicitors on 0808 231 1320

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What is Stamp Duty?

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Stamp duty explained

Get to grips with the basics on Stamp Duty and find out all you need to know, including if you need to pay it and when.

Stamp Duty is a type of tax you pay when buying a property or piece of land in the UK. It has different names depending where you buy. In England and Northern Ireland it’s called ‘Stamp Duty Land Tax’, in Scotland it’s called ‘Land and Buildings Transaction Tax’ and in Wales ‘Land Transaction Tax’.

How Stamp Duty works

There are several rate bands for Stamp Duty. The tax is calculated on the part of the property purchase price falling within each band.

Find out how much Stamp Duty you'll pay using our table below.

How much is Stamp Duty?

How much Stamp Duty you will pay depends on the purchase price you pay and whether the property is a residential property or not. Whether or not you're a first time buyer affects the rate of Stamp Duty you pay, as does where you’re buying in the UK.

How do I pay Stamp Duty?

You need to pay Stamp Duty within fourteen days of buying a property or piece of land. It is possible to add Stamp Duty to your mortgage, but it's important to note that this will incur interest over the duration of the mortgage term, and will also affect your loan to value ratio (LTV). 

Check how much Stamp Duty you'll pay

How much the property or land cost you, stamp duty rate to be paid* , stamp duty example.

It’s important to keep in mind that the amount of Stamp Duty you pay is tiered. So, for example:

If you’re purchasing a £300,000 home, you won’t pay any Stamp Duty on the first £250,000. You will pay 5% on the amount between £250,001 and £300,000.

Land and Building transaction tax rate to be paid*

How much the property of land cost you , land transaction tax rate to be paid*, second home stamp duty costs, stamp duty surcharge on a second home.

If you're buying an additional property, including rental properties, second homes and holiday homes, you'll have to pay additional Stamp Duty. The amount you pay depends how the purchase price and location of the property. 

If you’re buying a second home in England and Northern Ireland you’ll pay an extra 3% tax on top of the usual rates.

When you buy a second home in Scotland or Wales you’ll need to pay an extra 4% of the total value of the property, this is called an additional dwelling supplement.

Learn more about getting a second home mortgage

Land Transaction tax rate to be paid*

Paying stamp duty.

Do you have questions about when you pay Stamp Duty, how you pay it and how you can claim a stamp duty refund? Look no further than our guide to paying Stamp Duty.

Stamp Duty FAQs

What is the stamp duty rate for first time buyers.

If you’re a first time buyer, you could get a discount on Stamp Duty, depending on where in the UK you are buying. In England and Northern Ireland you won’t need to pay any Stamp Duty if the house you’re buying costs £250,000 or less.

If you’re a first time buyer in Scotland you wont need to pay any stamp duty if the property or land you’re buying costs £175,000 or less. In Wales, you wont need to pay Stamp Duty on a property costing up to £225,000. 

See our first time buyer mortgages

How much is Stamp Duty on a second home or buy to let?

If you're buying an additional property, including rental properties, second homes and holiday homes, you'll have to pay additional Stamp Duty. The amount you pay depends how the purchase price and location of the property. 

• If you’re buying a second home in England or Northern Ireland you’ll pay an extra 3% tax on top of the usual rates.
• When you buy a second home in Wales you’ll need to pay an extra 4% of the total value of the property.
• In Scotland, you will need to pay an Additional Dwelling Supplement, which is an extra 6% on top of the standard rate. This was raised from 4% in December 2022.

What is the Stamp Duty threshold?

In England and Northern Ireland the Stamp Duty threshold as of 23rd September 2022 is £250,000. In Scotland it is £145,000. In Wales it is £225,000.

This means that you won’t need to pay any tax if the property you buy costs less than this, and if it’s the only property you will own. If you’re purchasing a property that costs more than this you will need to pay the Stamp Duty. 

When is Stamp Duty not payable?

There are certain circumstances in which Stamp Duty is either not payable or can be reduced. Examples of these situations include:

• When the property price is only just within a higher band, the seller or estate agent may accept a slightly lower price.
• If you’re divorcing or separating from your spouse or partner, there’s no Stamp Duty to pay if you transfer a proportion of your home’s value to them. 
• If you transfer the deeds of your home to someone else – either as a gift or in your will – they won’t have to pay Stamp Duty on the market value of the property.

Do I pay Stamp Duty if I'm not a UK resident?

From 1 April 2021, if you’re a non-UK resident buying a residential property in England or Northern Ireland,  an additional 2% will be payable on top of the existing Stamp Duty rates for properties which cost more than £40,000.

The surcharge does not apply to purchases of land or buildings in Scotland or Wales.

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Form     01TL (PDF 150 KB)

Dealing type

TL  (transfer of lease or sublease)

TM  (transfer of mortgage or sub-mortgage)

TC  (transfer of charge)

Stamp duty -  required for a transfer of lease or sublease.

Any alteration to the consideration must be marked.

Not required for a transfer of mortgage, sub-mortgage, or charge.

Certificate of Title  - required for:

• Transfer of a first Mortgage/Charge
• the common property of a Strata scheme for a transfer of lease to the Owners Corporation
• lot 1 in a Community Title scheme for a transfer of lease to the Association.

Not required for a transfer of a lease.

NOS form -  required for a transfer of a Crown land tenure Term Lease or a Crown land Real Property Act lease. Panels 1, 2, 3, 4 and 5 require completion. Ignore 3A and 4 if the transfer is not for value.

Not required for a transfer of a lease, mortgage or charge.

Standard form of Caveat  - prevents registration where the caveat is drawn against the lease, mortgage or charge.

Does not prevent registration where the caveat is drawn against the land.

Priority Notice noted on the Register  - see  Priority Notice  page.

Minister's consent may be required for transfer of a Crown land tenure Term Lease or Crown land Real Property Act lease. Where the Minister's consent is required to lease or mortgage, consent is also required to transfer that lease or mortgage. Where the transfer is pursuant to a court order and affects a perpetual leasehold title, the Minister must be notified.

The dealing must not include any reference to the transferor or transferee being a trustee, executor or administrator for another party.

A transfer of lease affecting an expired lease will only be registered where:

• the expired lease is still recorded on the register;
• the lease expired less than 12 months ago or
• the lease contains a current first option to renew or
• is within 12 months of expiry period or within a current first option to renew term, and is accompanied by a Variation of lease extending the term. 

A transfer of lease affecting a lease carried forward as a subsisting interest, i.e. 'Bk ... No. ... Lease To ...' must either:

• be registered as a deed in the General Register of Deeds and a Request form 11R together with an Old System search showing the party entitled to deal with the lease must be lodged to record the interest. A change in proprietorship must be registered in the General Register of Deeds. See Baalman And Wells, Land Titles Office Practice, Lawbook Co. 2001 [390.100]. Note The Transfer of Lease form 01TL cannot be registered in this instance or
• an Old System search of the leasehold title and
• their qualification
• that he or she has inspected all deeds since the leasehold title was created to the present time
• the registered Book and No. and type of all instruments inspected to show the leasehold title has not expired and
• the registered Book and No. and type of all instruments to which the leasehold estate is subject.

A notification (code ULD): 'Devolution of Lease' is entered in the Second Schedule and all further transactions affecting the lease may be lodged on a  Real Property Act form and do not require further evidence of devolution.

Refer to Legal through the Senior Examining Officer in both instances.

Examination requirements for a transfer of a sublease or sub-mortgage are the same as those for a transfer of lease or mortgage.

A transfer of more than one lease, mortgage or charge involving the same transferor (e.g. the same mortgagee) and transferee is a multiple instrument. See Fees page.

Suitably modified the form may be used to:

• discharge a mortgage of a lease where the mortgagee has been recorded as the lessee and the interest of the mortgagor has been protected by a Registrar General's caveat ( registration requirements ); or
• transfer a mortgage of lease (including a Crown Land lease) under power of sale ( registration requirements ).

(A) The registered number of the lease, mortgage or charge being transferred must be stated.

(B) The reference to title for the land affected by the lease, mortgage or charge must be stated. In the case of a transfer of lease affecting a lease folio, the number of the lease folio only must be stated.

A transfer of lease involving part of the land may be registered.  It is more common for a sub-lease to be lodged, see Baalman And Wells, Land Titles Office Practice, Lawbook Co. 2001 [550.100].

(D) The full name of the transferor must be stated and must be identical to the name of the registered proprietor of the lease, mortgage or charge as shown on the Register.

(E) The consideration is optional.

(F) A writ against the lease, mortgage or charge must be noted in the Encumbrances, or the Court must consent to the dealing, or the writ must be removed.

(G) The full name of the transferee must be stated.

For a transfer to the mortgagor, lessor or charger (annuitant) .

(H) Tenancy/shares must be stated where there is more than one lessee, mortgagee or chargee. Reference to the tenancy/shares will not be entered on the Register.

(I) The dealing must be executed by the transferor and the transferee and be witnessed, or it may be executed on their behalf as follows:

Where the dealing is a transfer of lease and the transferor or transferee is the Owners Corporation of a Strata scheme, execution must take the form as set out in Strata Schemes Approved Form 23  (PDF 128 KB).  The following certificates are also required:

• Strata Schemes Approved Form 13  (PDF 23 KB)   and
• Strata Schemes Approved Form 10 (PDF 8 KB) where the initial period is not shown as expired on the common property title.

Where the transferor or transferee is the Association of a Community, Precinct or Neighbourhood scheme, execution must take the form as set out in Community Title Schemes Approved Form 18  (PDF 20 KB). A certificate as in Community Title Schemes Approved Form 21 (PDF 20 KB) is also required.

See execution requirements for companies, witnesses etc. pages

(J) This section is to be completed where the notice of sale data (see NOS form above) has been forwarded to NSW LRS through the eNOS facility.

Staff processing information

If in order proceed with registration except for the following.

Refer to SM99  Where the dealing involves the owners corporation of a strata scheme. 

Refer to SD52  Where a joint tenancy is severed.

Refer to SD31   A transfer

• of a perpetual leasehold title pursuant to a court order.
• of lease by National Parks and Wildlife, i.e. Kosciuszko leases
• of a crown lease, e.g. a term Western Lands lease

Refer to SM98

• Transfer of lease or sub-lease
• Where notifications are recorded under a mortgage or charge that changes the ownership of the mortgage/charge or changes the name of the mortgagee/chargee.

Refer to SD2  A transfer: 

• of lease affecting a title shown in the ITS lease list.
• of a retirement village lease.  ( SD2  a transfer by an executor must be referred to Legal).

Refer to Legal through the Senior Examining Officer  A transfer of lease affecting a Book and No. lease accompanied by evidence of devolution of the lease.

Registration procedure

Transfer of lease

TRANSACTION  MOD

PRIME CODE    code of lease as shown on the Register

PRIME NO.    number of lease

SELECT  ‘Names’

CODE (name)     P, C or Q [name of all current lessees]

COPY & DELETE  (SEE [number of Transfer of lease])

SELECT ‘Lease Terms’

PREMISES DESCRIPTION    (See [dealing numbers of previous notifications that changed lessee] [number of transfer of lease]). [Premises description if any]

Note: Remove all previous dealings that changed lessee and add dealing numbers to the list of dealings in premises description, e.g. (See AA123456 AB456789 AC789123)

Transfer of crown lease

PRIME NO.    number of lease 

UCLT (Crown land lease - for NOS purposes)

ULTP (transfer of lease under power of sale)

CODE (name)    P, C or Q  [name of lessee or mortgagee; include all current lessees or mortgagees].

Transfer of a sub-lease 

TRANSACTION MOD

PRIME CODE    code of lease affected by the sub-lease as shown on the Register

PRIME NO.     number of lease 

SUB CODE code of sub-lease

SUB CODE NO. number of sub-lease

CODE (name)     P, C or Q [name of all current sub-lessees]

COPY & DELETE  (SEE [number of transfer of sub-lease])

PREMISES DESCRIPTION    (See [dealing numbers of previous notifications that changed sub-lessee] [number of transfer of sub-lease]). [Premises description if any]

Note: Remove all previous dealings that changed sub-lessee and add dealing numbers to the list of dealings in premises description, e.g. (See AA123456 AB456789 AC789123)

Transfer of a crown sub-lease

PRIME CODE    code of lease affected by the sublease or sub-mortgage as shown on the Register

ULT (sublease)

CODE (name)    P, C or Q  [name of lessee; include all current lessees]

click Cancel

AFFECTED NO.    number of sublease transferred.

Transfer of mortgage

PRIME CODE    code of mortgage as shown on the Register

PRIME NO.    number of mortgage

NEW PRIME CODE   M (where no mortgagee code exists)

MC etc (where a mortgagee code exists in ITS)

CODE (name)     P, C or Q where Prime Code M is selected  [name of all current mortgagees]

DETAILS  (See [dealing numbers of previous notifications that changed mortgagee] [number of Transfer of Mortgage]).

Transfer of charge

TRANSACTION MOD

PRIME CODE    code of charge as shown on the Register

PRIME NO.     number of charge

CODE (name)     P, C or Q [name of all current chargees].

DETAILS  (See [dealing numbers of previous notifications that changed mortgagee] [number of Transfer of Charge]).

Transfer of a sub-mortgage 

PRIME CODE    code of lease or mortgage affected by the sub-mortgage as shown on the Register

PRIME NO.     number of lease or mortgage

SUB CODE code of sub-mortgage

SUB CODE NO. number of sub-mortgage

CODE (name)    P, C or Q  [name of sub-mortgagee; include all current sub-mortgagees]

DETAILS  (See [dealing numbers of previous notifications that changed sub-mortgagee] [number of Transfer of Sub-Mortgage]).

Affecting a Book and No. lease with satisfactory evidence of devolution

ADD. TRANSACTION    UNDR

PRIME CODE    code of lease as shown on the Register

PRIME NUMBER    number of lease

SUB-CODE    ULD  (Devolution of Lease)

NSW Land Registry Services Office of the Registrar General Accessibility Sitemap Privacy Access to information Copyright Disclaimer Contact us

Evening Standard

Autumn statement 2023: what might it mean for London first-time buyers and homeowners?

Posted: November 21, 2023 | Last updated: November 21, 2023

Chancellor Jeremy Hunt will deliver his 2023 Autumn Statement at 12.30pm on Wednesday 22 November.

Alongside the Budget in spring, it’s the time for the government to reveal its future spending and tax plans.

As well as having an impact on household finances, there are several announcements that could be of interest to homeowners and those hoping to buy.

Last year’s Autumn Statement came hot on the heels of the disastrous mini budget that ended Liz Truss’s short stint as Prime Minister after then-Chancellor Kwasi Kwarteng sent inflation soaring and plunged the UK property market into mortgage chaos, falling sales and house prices, and an escalating rental crisis .

One year on, as Londoners struggle with high interest rates and the cost-of-living crisis chipping away at their housing security, could there be relief on the horizon revealed tomorrow?

Stamp duty threshold changes?

Stamp Duty Land Tax (SDLT) could be on the agenda, but the (contested) reforms bought in last year are due to last until 2025 – so there may be no change here.

SDLT is a tax charged when you buy property or land in England and Northern Ireland. Rates are graduated so the amount you pay is dependent on the type and price of the property, and who the purchaser is.

As part of the mini budget delivered in September 2022, Kwarteng reduced SDLT by raising the price threshold where it’s not paid – also known as the nil rate band (NRB).

Under these changes, first-time buyers (FTBs) purchasing a property for £435,000 or less pay no SDLT at all, although in London, where Halifax reports that the average property price for a FTB is £496,203 , many will still pay some SDLT.

For properties between £425,000 and £625,000, FTBs can claim relief and pay five per cent of the part of the property value that’s above that threshold, a saving of up to £8,750.

If the property costs more than £625,000, first-time buyers must pay stamp duty at the normal rate.

When Jeremy Hunt took on the role of chancellor following the fallout from said mini budget, he introduced a sunset clause for these reforms, so these limits will only apply until March 2025.

Even with these recent changes, more relief would be welcome for first-time buyers in the current economic climate, Rightmove's Tim Bannister said.

“Further cuts or a permanent change to the thresholds would be welcomed by many, particularly by affordability-stretched first-time buyers,” said Bannister.

“However, further stamp duty cuts are unlikely to lead to a rush of activity, as buyers would need to weigh up any benefit in savings against higher mortgage rates and their monthly mortgage payments.”

Stamp duty receipts have fallen sharply this year as property sales slumped due to the cost-of-living crisis.

There have been rumours that the government is considering extending SDLT to existing homeowners trying to downsize from a larger property to free up more, larger homes.

A recent study found one in three over 65s in London have more than one spare bedroom in their house .

But experts have cautioned that these kinds of cuts could have unintended consequences.

“Cuts to Stamp Duty Land Tax will likely result in higher volumes of property sales but the Chancellor must consider the knock-on effects,” said Tim Walford-Fitzgerald, private client partner at accountancy firm HW Fisher.

“The introduction of a ‘downsizing relief’ may drive more empty nesters to sell up and increase the number of larger properties coming onto the market – but these downsizers still need to live somewhere,” he explained.

“This could drive competition over properties that are classic first-time buyer territory, pushing up the prices for a demographic that the government should be supporting.

Rob Houghton, founder and CEO of reallymoving, argued that first-time buyers should get more support over downsizers with any stamp duty changes.

“Scrapping stamp duty for downsizers would target help at equity-rich homeowners, when right now support is more urgently needed at the other end of the market,” he said.

“Our data shows downsizers are already a very active group this year, motivated by the desire to reduce energy bills by switching to a smaller home that’s cheaper to run, which is helping free up larger family homes,” Houghton added.

“Any bandwidth in the budget for housing market support would be better targeted at first-time buyers, who face unprecedented challenges raising deposits in the midst of a cost-of-living crisis and affording higher mortgage rates.”

Inheritance tax cuts?

Rumours are swirling that the government is considering a sizeable cut to inheritance tax in a bid to woo wealthy voters.

Inheritance tax is nominally a death duty paid to the state when you die.

Currently, the standard inheritance tax rate is 40 per cent, which is charged on the part of the estate over the tax-free threshold of £325,000.

The Times has reported this could be halved to just 20 per cent in the upcoming autumn statement.

In London, where high property prices mean more people pay this tax than the national average, property currently accounts for 50 per cent of the money in estates paying inheritance tax, according to retirement specialist Just Group.

But for most people, inheritance tax isn’t as big of a deal as they might think, said financial expert Martin Lewis.

“The reality is, only four per cent of estates have to pay inheritance tax , but a much higher percentage of people worry about it,” Lewis told Politics Home.

“My answer to that would be it would be a lot cheaper to educate people about the system than it would to change the system.”

There are also concerns that reducing inheritance tax could compound the existing housing inequality between those who inherit wealth and those who don’t .

Mortgage guarantee scheme extension?

Another move in the Autumn Statement that may be relevant to first-time buyers is a potential extension to the existing mortgage guarantee scheme.

Introduced in March 2021 by then-chancellor Rishi Sunak, the scheme encourages mortgage providers to lend to would-be borrowers with smaller deposits.

Under the scheme, buyers can apply to take out a mortgage with a deposit of just five per cent on a home worth up to £600,000.

The scheme protects mortgage lenders offering these 95 per cent loans by the government promising to cover the losses if the borrower is unable to pay their mortgage and their house is repossessed.

Originally due to finish in December 2022, it was extended by another 12 months. It could still end next month, or another extension could be granted in this autumn statement.

“Any focus and support for those with the smallest deposits is always going to be welcome,” said Matt Smith, Rightmove’s mortgage expert.

“However, in reality the mortgage guarantee scheme is only able to help a very small portion of movers, with the majority of first-time buyers preferring to get the affordability benefits of saving for a bigger deposit,” he added.

“If the scheme was cancelled then it may be seen as a disappointing outcome by some, but in reality, it’s unlikely to have a significant impact on consumer choice, as many lenders are offering five per cent deposit deals outside of the government scheme.”

As well as 95 per cent loans costing buyers more each month, saving for a deposit is only half the battle argued Bannister.

“Having enough affordable homes in the right places has been an ongoing challenge,” he said.

“It’s clear from our analysis that people trying to buy on their own on the average salary are likely to be priced out of the majority of homes without significant financial help from elsewhere.”

Lisa’s for deposit savings?

There have also been whispers of new or improved Lifetime Isas – something that would be of interest to people saving up for the deposit on their first home.

Currently people aged between 18 and 39 can save up to £4,000 a year tax-free in a Lisa, with the government topping up their savings by 25 per cent.

This money can only be withdrawn without incurring a hefty penalty for buying a first home or turning 60.

Under the existing rules, this first house purchase must be on a property that costs £450,000 or less.

In London, where the average price of a house being put on the market in November was £673,257 , this can be an obstacle to first-time buyers, particularly for two savers buying together.

If you try to buy a house above that threshold, you’ll be stung by a 25 per cent penalty charge.

"First-time buyers who can’t find a suitable home under that limit and who choose to purchase a property over it not only lose the government bonus and any interest they’ve earned, they also lose around 6.25 per cent of their own savings," Katie Watts, head of campaigns at MoneySavingExpert told Homes & Property.

"For someone who’s been saving the maximum since the scheme started, that is a penalty of £1,750 of their own cash."

A raising of the threshold could benefit Londoner’s who have a chunky enough deposit already saved, then.

There are also rumours about a brand-new type of Lisa to encourage people to save for a deposit, but as no details have been released it’s hard to speculate what this could be.

To find out fact from fiction, you’ll have to tune in to our autumn statement live blog tomorrow to find out.

Register now for one of the Evening Standard’s newsletters. From a daily news briefing to Homes & Property insights, plus lifestyle, going out, offers and more. For the best stories in your inbox, click here .

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Paying Stamp Duty

Stamp Duty is a tax that you must pay when carrying out certain transactions that require legal documents.  Deeds of Conveyance, Deeds of Gift, Deeds of Mortgage, Release of Mortgage Loan, Release of Life Insurance Policies, Transfer of Shares, Deeds of Lease, Deed Polls, Bonds, and any other deeds, require “stamping”, which means you must pay duty.

When do I need to pay Stamp Duty?

How do i pay, how much does it cost, where can i find more information.

You must pay Stamp Duty when buying real estate or a home, acquiring shares, seeking a mortgage, or conducting other financial transactions.  The attorney, company or broker that is involved in these transactions can tell you which documents require stamping.

The attorney or the company transacting the business usually prepares the documents that require stamping and will make payment on your behalf.  The documents are presented to the Inland Revenue Division by the attorney or company for stamping together with the necessary fees.  The documents are processed and stamped accordingly.

The amount of stamp duty is usually a percentage of the value of the transaction you are undertaking.  Please follow the link below for detailed information on stamp duty rates. Stamp Duty Fees

Please contact one of the offices listed below between the hours of 8:00 am and 4:00 pm Monday to Friday except public holidays.  You may also visit the “Stamp Duty Fees” section of Inland Revenue Division website by following the link below.

The Stamp Duty Section Inland Revenue Division Ground Floor Trinidad House Edward Street Port of Spain Trinidad, West Indies Tel. (868) 623-1211-4

South Regional Office Inland Revenue Division Cipero Street San Fernando Trinidad, West Indies Tel. (868) 657-5775/6057

Tobago Regional Office Inland Revenue Division Sangster’s Hill Scarborough Tobago, West Indies Tel. (868) 639-2410/2538

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Will I be liable for stamp duty when the house comes to me after a divorce?

Q If a house is owned solely by a husband but the consent order agreed on divorce requires him to transfer the house to his wife subject to mortgage would she pay stamp duty?

Would the answer be different if the husband agrees following the court order that the new boyfriend may also take the property jointly with the wife as she is unable to get mortgage in her own name? The mortgage value is £185,000. SW

A There is no stamp duty land tax (SDLT) to pay when property is transferred from one party to another as part of an agreement or court order because a married couple is going through divorce proceedings, a legal separation or annulment of a marriage. The same special rules apply to couples in civil partnerships who are splitting up. So in your first example, no, the wife does not have to pay SDLT.

But yes, were the new boyfriend to take over some, or all, of the mortgage from the ex-husband, there could be an SDLT liability – the bill depends on how much of the mortgage he takes on. If it's less than £125,000 – which it would be if he took on half of the £185,000 mortgage you mention – there would be no SDLT to pay. If it's more than £125,000 the SDLT is payable at 1%, if it's more than £250,000 at 3% then at 4%, 5% and 7% on transactions above £500,000, £1m and £2m respectively.

There are no special rules for unmarried couples who are spitting up and transferring a property from one partner to the other. If the total of any cash paid and/or mortgage share taken over comes to more than the £125,000 threshold, there will be an SDLT bill.

If you give property away, in the instance of one reader who wrote in, and the property has a mortgage on it, there will be SDLT to pay if the value of the mortgage is over the SDLT threshold. But if you give property with no mortgage attached, there's no SDLT to pay (although there may be a capital gains tax liability, which applies whether the property has a mortgage on it or not).

Muddled about mortgages? Concerned about conveyancing? Email your homebuying and borrowing worries to Virginia Wallis at [email protected]

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Stamp duty and child benefit: Unfinished business Hunt has to tackle in 2024

There were a number of issues not addressed in the autumn statement .

Yesterday’s Autumn Statement saw the Chancellor introduce a range of new measures including a larger than expected cut to national insurance , an increase to benefits of 6.7 per cent, and a rise in the state pension of 8.5 per cent.

However, there were several items missing from the agenda that were widely expected to be discussed including stamp duty and child benefit reforms.

Below, we take a look at the issues Jeremy Hunt has yet to face in the new year.

Fiscal drag

The obvious issue that Mr Hunt did not address is the increase in the personal allowance and tax bands. Fiscal drag is the elephant in the room for the Chancellor, dragging more taxpayers into higher rates of tax as wages increase but tax allowances and thresholds stay the same.

Pensioners who may be relieved to hear of an 8.5 per cent increase to the state pension will also be dragged into the tax net by 2026-27 if the state pension increases by 4 per cent a year and the planned freeze to the personal allowance continues.

The standard personal allowance is £12,570 and is the amount of income you do not have to pay tax on. It was frozen by Mr Hunt in 2021 for four years.

Those benefitting from an increase in the living wage (a potential gross full time salary of £20,820) will also see less of the rise in their pockets due to freezing of the personal allowance.

A further knock on effect is that anyone who can currently claim the marriage allowance, which lets someone with income below the personal allowance transfer up to 10 per cent of their personal allowance to a basic rate spouse or civil partner, may see the benefit massively reduced or removed and will need to keep an eye on this to make sure they do not make an incorrect claim.

Child benefit charge

The hugely complicated and unfair high income child benefit charge has survived another Autumn Statement. The charge claws back child benefit from couples where one or more of them has income of over £50,000, with the benefit clawed back in full if your income exceeds £60,000.

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This is assessed on the higher earner rather than the person receiving the benefit. If your income is over £60,000, child benefit is clawed back in full. The charge is unfair for a number of reasons.

You could have a couple living together earning £49,999 each (a total household income of £99,998) unaffected by the charge, whereas a single earner earning £61,000 would have to repay the benefit in full. It is also something of a misnomer in that it is a “high income” charge which can affect basic rate taxpayers with income between £50,000 and £50,270.

Administratively it is also a nightmare for taxpayers as HMRC insist that a self-assessment tax return is filed if you are affected by the charge.

With an announcement hidden in the Autumn Statement that anyone with income solely from PAYE will no longer have to file a tax return, this means a high earner may not need to file a tax return, but someone on £51,000 would need to file a tax return in order to pay the benefit.

Given the current housing crisis and the slump in activity in the market caused by punitive mortgage rates, many would have welcomed a temporary stamp duty holiday to help first-time buyers on the property ladder and possibly encourage people to downsize. However, there was no mention of this

Stamp duty is a tax people have to pay on residential properties costing more than £250,000, unless they qualify for first-time buyers relief.

The Government did, however, announce that the mortgage guarantee scheme , which allows buyers to apply for a mortgage with a deposit of just 5 per cent on a home worth up to £600,000, has been extended for 18 months until June 2025.

Relief for working from home

The Chancellor wants to help workers and increase flexibility to get more people with disabilities into the workforce. An easy way to do this would be to introduce tax reliefs for hybrid workers and those who work from home . It is currently very difficult (almost impossible) for an employee to claim deductions for working from home.

If your employer requires you to work from home you can claim a flat allowance of £6 per week, and hybrid workers can claim nothing.

Given the shift in working patterns post pandemic and the huge increases in the cost of utilities, a reform to the deductions employees who work from home can claim would be welcomed and in particular help those who struggle to work outside of the home with the costs of home-working.

Savings allowance

The personal savings allowance is currently £1,000 for basic rate taxpayers, £500 for higher rate taxpayers, and zero for additional rate tax payers (those with income over £125,140).

This is the total amount of interest you can earn each year across all of your bank accounts (except Isas) without paying tax.

Given how current interest rates have jumped over the last year or so, an increase in the savings allowance (even temporary) would have helped those with savings pay a little less tax.

Everyone else

The Chancellor made it clear the purposes of this statement was to benefit workers. National insurance cuts certainly only benefit those in work, which means every other taxpayer has lost out, including pensioners living off their pension and/or investment income.

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Nigeria: Exploring Mortgage Transactions And Stamp Duties In Nigeria's Business Landscape – Part 2

In the first part of this series, "Exploring Mortgage Transactions and Stamp Duties in Nigeria's Business Landscape," we delved into the intricate relationship between mortgage transactions and stamp duties, shedding light on their historical origins and the evolving landscape of financial practices. We discussed the creation of mortgages, the roles of different parties, the significance of legal and equitable avenues, and the essential legal instruments that guide the journey.

In this second part, we will continue our exploration, delving even deeper into critical aspects of mortgage transactions and stamp duties. We will examine key individuals responsible for paying duties on executable mortgage instruments, the crucial timeframes within which mortgage instruments must be stamped, and the far-reaching consequences of failing to adhere to stamping requirements. By understanding these intricacies, businesses and financial professionals can make informed decisions, ensuring compliance and strategic advantage within Nigeria's evolving business climate.

Persons Liable to Pay Duty on Executable Mortgage Instruments

The payment of stamp duty is a legal requirement. The parties responsible for fulfilling this duty, as well as the precise amounts or rates applicable, are explicitly outlined rather than inferred. These particulars, though, are contingent upon the specific type of documents necessitating stamping. The individuals obligated to fulfill the duty and the corresponding rates, as specified by the Stamp Duty Act, are comprehensively presented in the table provided below 1 :

In various jurisdictions such as Singapore, the party responsible for paying stamp duties on documents is determined by the terms and conditions outlined in the agreement or legal instrument. 2 In cases where the instrument does not specify such terms, the Commissioner for Stamp Duties wields discretionary authority to designate the payer, as detailed in the Third Schedule of the Act. This schedule explicitly indicates that in mortgage transactions, the responsibility of paying stamp duty rests with either the mortgagor or the obligor. 3

In Nigeria, the SDA definitively establishes that the duty on mortgage instruments, the process of enhancing a legal mortgage, and the guarantor's form lies squarely with the mortgagee. However, it is common in practice for the mortgagee to transfer this responsibility and any other applicable charges to the mortgagor. This practice is deeply ingrained through the inclusion of a "net of tax clause" in contractual documents duly executed by the involved parties. To illustrate, let's delve into the practical application of the net of tax clause.

Illustration:

JAPA Ltd, a corporate entity, employed one of its owned properties in Lagos as collateral for a substantial credit facility amounting to N160 million from KOLERE Bank Ltd. During the process of formalizing the legal mortgage, a specific clause was included in the agreement, reading as follows:

"The party offering the property as collateral (mortgagor) assumes the responsibility for covering all applicable taxes, fees, charges, and any ancillary expenses arising from this transaction or pertaining to the mortgaged property."

This clause effectively assigns the obligation of settling all tax obligations, including stamp duties, to the mortgagor, thereby shifting the financial responsibility to the other party, notwithstanding prevailing legal provisions.

Judicial Precedent in Favor of Clause Enforcement

In a notable legal case, Total Nig Plc v Moshood Akinpelu 4 , the Court of Appeal ruled in favor of the party enforcing the obligation outlined in the covenant. The court's perspective was that since the party (Total Nig Plc) had committed in the covenant to make the payment on behalf of the other party (Moshood Akinpelu), the mere intention and determination to fulfill the covenant were sufficient for the payment to be made directly from the appellant's funds. The court justified this stance by highlighting the absence of a legal restriction on another party making the withholding tax payment and the covenant's explicit assignment of responsibility.

Unsettled Legal Contention

This perspective seems unsettled, especially if the party (mortgagor) who agreed to pay the tax (as per this instance) refuses or neglects the duty. Should the mortgagor bear liability and potentially be sued by the relevant tax authority? The viewpoint is that no legal cause exists between the tax authority and the party agreeing to pay the tax. Instead, the cause of action rests with the party designated with the legal responsibility as mandated by law.

The aforementioned judgment seems to legitimize the practice of transferring tax liability to another party through contracts or agreements. However, this does not absolve the statutory duty to pay tax by the party obligated by law. It's essential to note that the precedent set in Total Nig Plc v Moshood Akinpelu is distinguishable from the mortgage transaction. Although personal income tax in the form of withholding tax (WHT) on rent paid to the lessor is involved, the law mandates that the rent payer holds the obligation to withhold and remit the tax to the Revenue Authority, thus reinforcing the law. This contrasts with the liability to pay stamp duties on mortgage instruments, which the SDA explicitly imposes on the mortgagee.

Furthermore, there's no justification for the relevant tax authority to initiate legal action for unpaid stamp duties against the mortgagor. Unpaid stamp duty is considered a government debt and is recoverable solely from the mortgagee. 5

To navigate this scenario, the "responsibility for own tax clause" can be included in the agreement. This clause ensures fairness, as multiple legal instruments are often involved in the lifespan of a mortgage transaction. Both mortgagee and mortgagor bear specific responsibilities to pay relevant stamp duties for each instrument, as outlined in the table above. A sample clause might read:

"Each party shall assume tax responsibilities based on the nature of the mortgage transaction. Moreover, neither party shall transfer any taxes to the other except where such taxes are legally mandated to be withheld and remitted by the deducting party."

Alternatively, the "tax compliance clause" could be introduced, stipulating that party tax liabilities conform strictly to applicable law, as follows:

"Each Party shall be strictly bound to comply with relevant tax treaties in the manner and extent as prescribed by the applicable law."

With this in mind, a legislative amendment is recommended to safeguard the mortgagor's negotiation power and strike a balance against the mortgagee's unequal influence on bargaining power, which could compromise the mortgagor's equity of redemption right.

Timeframe for Stamping Mortgage Instruments

Every legal instrument subject to duties under the SDA is bound by specific timeframes for stamping and duty payment. In the context of mortgages executed within Nigeria, a stipulated period of 40 days is provided. For documents executed outside of Nigeria, the timeframe is 30 days from the delivery date of the said document within Nigeria. 6

Ramifications of Failing to Stamp Mortgage Instruments

Non-compliance with the stamping requirement carries significant implications. A noteworthy legal consequence of such non-adherence is the document's inadmissibility as evidence in civil court proceedings. 7

However, this consequence was subject to reconsideration by the Supreme Court in the case of R.G. Okwuwobi V Jimoh Ishola 8 . The Court's conclusion attenuated this consequence, emphasizing that the primary intent of the stamping requirement is to ensure compliance and generate government revenue. As such, the failure to comply would not necessarily render the documents inadmissible as evidence. The Court's perspective was expressed as follows:

We think that it was wrong for the learned Chief Magistrate to have held a document inadmissible merely on the ground of non-stamping, since the purpose of the requirement of stamping is to ensure that Government does not lose revenue thereby. The learned Chief Magistrate could have directed the document in question to be duly stamped and then received it in evidence 9

Conclusion and Key Takeaways

The landscape of mortgage transactions, whether pertaining to immovable or movable assets, has evolved significantly. Acknowledging this evolution is pivotal, given that the domain of mortgages now extends to cover both asset types. Additionally, the execution of a mortgage deed, irrespective of its written or electronic form, holds significant legal weight as a dutiable component. Parties actively participating in such transactions must not only comprehend the distinct characteristics of the document at hand but also discern its intended purpose. This understanding, in turn, dictates the specific obligations binding the involved parties concerning the imperative task of stamping the instrument.

A Fundamental Imperative

For those individuals, as stipulated by law, burdened with the responsibility of shouldering stamp duty expenses associated with mortgage instruments, proactive measures are of the essence. Such measures serve to preclude the emergence of avoidable legal disputes that can disrupt the smooth executability of the mortgage transaction.

Strategic Insight

During the intricate process of negotiating mortgage terms, a pivotal element demands utmost attention: understanding the latitude at which parties can transfer tax liability to the opposing party within the specific context.

Utmost Significance

Superseding all other considerations, every party partaking in mortgage transactions must internalize that, irrespective of the contractual tenets upheld by courts, tax authorities are primarily concerned with one critical objective: ensuring the settlement of pertinent taxes. The essence of the tax authority's focus transcends the agreements made amongst parties, centering on securing the fulfillment of due taxes. It is imperative to grasp that the tax authority reserves the right to initiate legal action solely against the individual legally entrusted with the statutory duty.

Given the intricate nature of such matters, soliciting the expertise of legal practitioners becomes an indispensable step to navigate this intricate legal landscape successfully.

1. Section 23(3)(c) and 31 of SDA 2004 (as amended)

2. Article 9(1) of the SDA Singapore 1929

3. See the 3rd Schedule to the SDA Singapore 1929

4. (2004) 17 NWLR (pt. 903) 509

5. Section 114 of the SDA

6. Section 23(3)(a) of SDA

7. Princewell Asuquo & Ors v Grace Eyo & Ors (2013) LPELR – 20199. The provision of Section 22(4) of the SDA is to the effect that in civil cases, such unstamped documents shall be inadmissible in evidence in any court.

8. (1973) All NLR 233

9. R.G. Okwuwobi V Jimoh Ishola (1973) All NLR 233 . This decision seems to modify the inadmissibility consequence of an unstamped document.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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