A limited company buying a residential property in England or Northern Ireland pays stamp duty land tax at the standard residential bands plus a 5 percent surcharge that applies to companies, per HMRC's guidance on corporate bodies, and where the price is over £500,000 a flat 17 percent rate applies instead unless a relief does, the most common relief being that the property is used in a property rental business. So the answer to do limited companies pay stamp duty is yes, and more than an individual buying their only home. This page sets out the bands and the surcharge, the 17 percent rule and its reliefs, the non-resident surcharge, and the comparison with an individual, and points to the free stamp duty calculator for limited company purchases on this site, which works all of it on the price you enter.
The bands, and the 5 percent on top
Per gov.uk the residential bands are nothing on the first £125,000, 2 percent on the portion to £250,000, 5 percent to £925,000, 10 percent to £1.5 million and 12 percent above; and per HMRC's corporate bodies guidance there is a 5 percent surcharge on residential properties bought by companies, applied to every band. A company's rates are therefore 5, 7, 10, 15 and 17 percent across the bands. On a £320,000 purchase the company pays £22,000: £6,250 on the first band, £8,750 on the second and £7,000 on the £70,000 in the third, against £6,250 for an individual buying their only home.
The 17 percent rate over £500,000, and the reliefs
Where a company buys a residential property for more than £500,000, SDLT is charged at a flat 17 percent on the whole price, per gov.uk, unless a relief applies. Relief is available where the property is used in a property rental business, bought by a developer or trader, used in a trade making it available to the public, bought by a lender in the course of lending, occupied by employees, a farmhouse, or bought by a qualifying housing co-operative. A company buying to let therefore pays the banded rates with the surcharge, not 17 percent; a company buying a home for its director to live in pays 17 percent and may also owe the annual tax on enveloped dwellings.
The non-resident surcharge, and Scotland and Wales
A company that is not UK resident for SDLT purposes pays a further 2 percent on top of all other residential rates including the 5 percent surcharge, per gov.uk. The tests for a company's residence are its own and differ from the individual's 183 day test. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax, each with its own bands and its own supplement for additional dwellings, and neither is worked by the calculator on this site, which is England and Northern Ireland only.
What the company structure costs on the way in
The line that matters is the difference between what the company pays and what an individual buying their only home would pay, because that is the price of holding the property in the company, set against the corporation tax treatment of rent and mortgage interest inside it and the dividend tax on taking the profit out. The stamp duty calculator for limited company purchases prints that difference beside the tax, and the tax itself is due within 14 days of completion on a return to HMRC whether the company finds the answer convenient or not.
Questions people ask about stamp duty for limited company
Does the 5 percent surcharge apply to a company's first property?
Yes. Unlike an individual, who pays the higher rates only when they will own more than one home, a company pays the surcharge on a residential purchase regardless of what else it owns, per HMRC's corporate bodies guidance.
Does a company pay stamp duty on a commercial property?
It pays SDLT at the non-residential rates, which have their own bands starting at £150,000, per gov.uk, and neither the 5 percent surcharge nor the 17 percent rate applies to non-residential or mixed-use property. The calculator on this site is for residential purchases only.
Is stamp duty deductible for corporation tax?
Not as a trading expense. It is part of the cost of acquiring the property and goes into the base cost for any later chargeable gain, so it is relieved when the property is sold rather than when it is bought.