Stamp Duty and LTT on Mortgages

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Tax is payable on the creation of new secured borrowings.

Registered charges on freehold or flying freehold properties attract stamp duty at a rate of 0.5% of the loan sum, plus a registration fee of £80.  Where a borrower is re-financing an existing loan only the registration fee of £80 is payable where the new borrowing does not exceed the unpaid amount on the existing loan. Where the new borrowing is greater than the unpaid amount of the existing loan, stamp duty is payable at 0.5% on the excess, in addition to the registration fee.

Charges on share transfer properties are secured by security interest agreements, and involve two different charges.  Land Transaction Tax ("LTT") is payable at a rate of 0.5% of the loan sum and lenders also require the security interest to be registered on the Security Interest Register, incurring a further fee of up to £150.
First time buyers who satisfy the strictly drawn criteria can qualify for concessionary rates. For more information click here.

Where the market value of the property does not exceed £300,000 then the stamp duty or LTT payable will be nil plus the £80 registration fee. Where it exceeds £300,000 but does not exceed £400,000 it is payable at 0.25% on such amount of the borrowing as exceeds £300,000 (subject to a minimum of £25) plus a registration fee.  First time buyers are exempt from Security Interest Register fees.

Click here for our Mortgage Stamp Duty Calculator.

The information and expressions of opinion contained in this guide are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.