In most instances for most residential lease extensions with a premium of less than £40,000, stamp duty, or SDLT, is not applicable.
Stamp Duty is owed if the cost of your lease extension premium is over £125,000 however a standard lease extension premium cost is generally a lot less than this, so in many cases, stamp duty is not applicable.
However, strict rules apply if you own other properties or if the lease extension is very expensive.
When do you pay Stamp Duty?
The rules depend on whether this property is your only home or an additional property (like a buy-to-let).
Scenario A: This is your only property (Main Residence)
- Premium under £125,000: No Stamp Duty.
- Premium over £125,000: You pay Stamp Duty on the amount above £125,000.
Example: If your lease extension costs £150,000, you pay 2% on the £25,000 difference (which is £500).
Scenario B: You own other properties (Second Home / Buy-to-Let)
- Premium under £40,000: No Stamp Duty.
- Premium £40,000 or more: You pay the 5% surcharge on the entire amount.
Example: If the extension costs £50,000, you pay 5% on the whole £50,000 (which is £2,500).
Talk with a Lease Extension Specialist Today
To find out more about how we can help, speak to one of the Client Service team on 0800 098 2770, or fill in our Contact Form, or send us an Email via [email protected].
