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There are five main types of tax that landlords have to pay:
Stamp duty is usually the first tax that landlords have to deal with.
You pay it when you buy any property in the UK. In 2020, Rishi Sunak announced a Stamp Duty holiday. Take a look at how this affects you.
The rate depends on the purchase price:
|Property purchase price||Stamp duty|
|up to £125,000||0 %|
|£125,001 – £250,000||2 %|
|£250,001 – £925,000||5 %|
|£925,001 – £1,500,000||10 %|
|over £1,500,000||12 %|
You pay an additional 3% in Stamp Duty if you’re purchasing:
To calculate it, add the rent (minus expenses) to your other income sources: this determines your tax band.
|up to £12,570||0 %||Personal allowance|
|£12,571 to £50,270||20 %||Basic rate|
|£50,271 to £150,000||40 %||Higher rate|
|over £150,000||45 %||Additional rate|
Check out our guide to paying tax on rental income for more information.
You need to pay Class 2 National Insurance on your rental income if:
You need to pay CGT when you sell property for a profit:
|Overall annual income||CGT rate (applies to your entire CGT profit)|
|below £50,270||18 %|
|over £50,000||28 %|
You don’t pay CGT for:
Check out our CGT calculator for more details.
How you pay CGT on property:
|Who owns the estate||Estate value||Inheritance tax|
|Couple / Civil partnership||under £650,000||0%|
|Couple / Civil partnership||over £325,001||40%|