Stamp duty and mortgages

When Is Stamp Duty Payable on a Mortgage Transfer?

Stamp Duty Land Tax (SDLT) is generally not payable when property is transferred with no consideration. However, an exception applies when a mortgage is wholly or partly transferred.

If one party assumes responsibility for a mortgage, this is treated as consideration for SDLT purposes. If this amount exceeds £40,000, SDLT may be due, particularly when the transferee owns multiple residential properties.

How SDLT Applies to Mortgage Transfers

If the value of the mortgage assumed is over £40,000, and the transferee owns another residential property, the 3% additional SDLT rate applies on the portion of the mortgage taken on, up to £125,000.

For example:

• A property is transferred with a £100,000 mortgage, and the new owner assumes £50,000 of that mortgage.
• Since the consideration exceeds £40,000, SDLT is triggered.
• If the new owner already owns another property, the 3% additional rate applies to the £50,000 mortgage share.

Unlike some tax reliefs, there is no SDLT exemption for transfers between spouses. Spousal property transfers that involve mortgage assumptions can still result in an SDLT charge.

How We Can Help

At Lewis Brownlee, we provide expert Stamp Duty and mortgages advice to ensure tax-efficient property transactions. We help clients understand their SDLT liabilities and plan property transfers strategically.

We offer a free introductory meeting to discuss your property tax concerns. Help is at hand!

For professional tax advice, contact us today.

Understanding Stamp Duty and mortgages is crucial when transferring property with an existing mortgage. Planning ahead can help minimise unexpected tax liabilities and ensure compliance with SDLT rules.