STAMP DUTY CHANGES FOR NON-UK RESIDENTS

Starting 1st April 2021, non-UK residents who wish to buy a property in England will now have to pay a 2 percent surcharge for stamp duty.




An identified non-UK resident transaction will have a 2 percent surcharge. This applies to a purchase of a residential property whether freehold or leasehold in England and Northern Ireland. This applies on top of all other residential rates of SDLT, including the zero rates and the rates for first-time buyers, buying additional property, purchases made by the companies, and purchases where the consideration surpasses the higher rate threshold.

 

The government guidelines state the non-UK resident will have a refunded surcharge if the individual is present in the UK for at least 183 days during any continuous 365 days period within two years in reference to the transaction date. There are also special guidelines for partnerships, co-purchasing spouses, etc. 

 

For Example, Anna purchases a freehold property in London on 12 August 2021 for £800,000. Anna is a first-time buyer but since the property is above £500,000, the first-time home buyer relief does not apply to her. 

 

Between 12 August 2021 and 12 August 2022, Anna only spent 80 days in the UK. Therefore, in relation to the transaction, she is a non-UK resident. 

 

Her SDLT liability is calculated as follows:

· 2% up to £125,000 = £2,500

· 4% of £125,001 to £250,00 = £5,000

· 7% of £250,001 to £800,000 = £38,500

 

Anna has a total SDLT liability of £46,000.

 

When can you be eligible for surcharge refund?

 

For Example, Emilia purchases a freehold property in London on 12 September 2021 for £700,000. Emilia is a first-time buyer but since the property is above £500,000, the first-time home buyer relief does not apply to her. 

 

Between 12 September 2021 and 12 September 2022, Emilia spent 8 months in the UK. Therefore, in relation to the transaction, she is eligible for a surcharge refund.