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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:
Scotland and Wales have different rates and exemptions.
To calculate it, add the rent (minus expenses) to your other income sources: this determines your tax band.
Income | Tax rate | Description |
---|---|---|
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:
Inheritance tax is a tax on everything you leave when you pass away (also called your “estate“):
Who owns the estate | Estate value | Inheritance tax |
---|---|---|
Yourself | under £325,000 | 0% |
Yourself | over £325,001 | 40% |
Couple / Civil partnership | under £650,000 | 0% |
Couple / Civil partnership | over £325,001 | 40% |
Or see our Guides, Calculators or Taxopedia
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