Stamp
Duty:
Amazingly the Stamp Act came into force in 1891
and stated that documents were not to be used as evidence in court unless they
were stamped. Therefore tenancy agreements should be stamped just in case
they have to be presented to a judge as evidence. Judges have started to
tighten up on the stamping of documents. For years they have been fairly
lax about it, but now the treasury has seen that there is a small fortune to be
made here. On October 1st 1999 stamp duty charges changed dramatically and
now stand at:
| Rates of Stamp Duty: |
| The standard rate of Stamp Duty on tenancies with a term of up to 7 years is 1% with a minimum payment of £5.00 and rounded up to the nearest £5.00. |
| Exclusions from the standard rate: (maximum payment of £5.00 payable) |
| However, the following types of tenancy are excluded from the standard rate: |
|
| Exemption from paying Stamp Duty as long as all the following apply: |
|
As you can see from above we provide landlords
with a tenancy agreement of 364 days so that they can avoid the paying of 1% and
instead settle for £5.00 – this is especially useful where the rent is in
excess of £5000 per annum.
Unfurnished Properties – attract a Duty of
1% regardless of the length of the tenancy. However, if they are below the
£5000 threshold then no duty is payable.
Legal update: 16 October 2026
The Stamp Act examples and 1999 rates above are historical and do not describe current tax on residential leases. Stamp Duty Land Tax replaced the former stamp duty arrangements in England and Northern Ireland, and liability on a lease now depends on the premium and, where relevant, the rent and lease length.
Check SDLT on leasehold transactions. Update by Simon Burrage.
