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:

  • tenancies of furnished properties let for less than 1 year
  • the Counterpart - as long as it is signed by the tenant only
  • the Duplicate copy as long as there is proof that the original has been stamped.

Exemption from paying Stamp Duty as long as all the following apply:

  • the agreement is for less than 7 years
  • the average annual rent, or total annual rent does not exceed 5000.00
  • the premium is 60,000 or less

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.


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