Stamp duty and leasehold property
Stamp Duty Land Tax (SDLT) is payable whether you buy a freehold property, a new or existing leasehold property or a shared ownership property. SDLT has been replaced in Scotland by the Land and Buildings Transaction Tax and in Wales by the Land Transaction Tax. The amount of SDLT you pay when you buy a leasehold property, depends on whether it’s an existing lease (an assigned lease) or a new one. There are also different amounts of SDLT payable depending on whether you are buying residential or non-residential property.SDLT on an existing lease, described as an assigned lease, is usually based on the lump sum paid for the assignment of the lease. In most cases, the amount of SDLT due is worked out in the same way as if the purchaser had bought a freehold residential or commercial property.SDLT on new leases is payable both by reference to lease premiums and to the rental element of a lease. The premium is broadly treated for SDLT purposes as if it was a payment for the purchase of a freehold. In cases where SDLT is payable, both the lease premium or purchase price and the net present value of the rent payable are calculated separately and then added together to obtain the amount of SDLT payable. For non-residential properties the nil rate band does not apply if the relevant rental figure for the lease is more than £1,000 per year.