What fresh hell is this??

[Ihavethesecret]

Thought my friend was joking when she said as a tenant I'd need to pay STAMP DUTY. Wtaf!
www.chancellors.co.uk/resource-centre/useful-information-for-tenants/stamp-duty-land-tax-for-tenants

Because I've been renting a while I HAVE TO PAY TAX ON MY RENT. I might just as well give up now
residential tenancies have the potential to be liable for Stamp Duty Land Tax (SDLT). The SDLT threshold was raised in March 2005 to £120,000 and in March 2006 to £125,000. SDLT is a tax levied on tenancy transactions, paid by Tenants and is calculated on the amount of gross rent for the term of the tenancy less a pre-set discount (Temporal Discount Rate) (currently 3.5%).

SDLT is due on rents that exceed £125,000, cumulatively, during tenancies - so not a problem for the vast majority of tenants then.

dawnsandovalresidential.co.uk/stamp-duty-land-tax-charges-renting/

Unless your average rent for the last/future 7 years (thats the liability limit) is more than £1500 per month it will not effect you. If it is i suggest that you move before you reach the £125000 limit

Have you paid more than £125,000 in rent in the last 7 years OP?

Wow! I didn't know about this! Doesn't this penalise people in London significantly?

I wasn't aware of that - but I don't rent.
Over 7 years, that's around £1,500 a month, not that much in terms of London rental rates.
As the thresholds haven't increased in over 15 years, but a quick google suggests that average weekly rents have moved from £120 to £200 (67%), it sounds like they're due a hike, but that's probably unlikely in the current climate.

Most people don't sign private rental that long that it would amount to the money.

If this wasn't on, wouldn't leashold buyers be free of Stamp duty? I guess it's because of taht

Ignore me. I've just realised it's accumulative.

Imagine hmrc actually goes after it. Tenants with lifelong tenancies and such would be fucked👀

@EveryDayIsADuvetDay

I wasn't aware of that - but I don't rent. Over 7 years, that's around £1,500 a month, not that much in terms of London rental rates. As the thresholds haven't increased in over 15 years, but a quick google suggests that average weekly rents have moved from £120 to £200 (67%), it sounds like they're due a hike, but that's probably unlikely in the current climate.

I had no idea this existed

One of mum’s neighbours rents a three bed house, he has his kids half the time. He’s been there at least four years. I wonder if he knows about this.

I hadn't come across this before, but from the link below it looks like the cumulative rent thing only applies if the renewal of the tenancy is essentially a continuation of the old tenancy. If you negotiate a new tenancy on different terms – even with the same landlord – the new and old tenancies may not be linked and the count can start from zero again.
www.theguardian.com/money/2020/oct/05/as-a-tenant-when-am-i-liable-for-stamp-duty

I have a lifetime tenancy from a housing association what the fuck

I saw an article in the Guardian about this. Anyone paying this much rent can afford to buy surely? (I realise you may not want to buy at the moment).

I did not know this

@Gwenhwyfar

I saw an article in the Guardian about this. Anyone paying this much rent can afford to buy surely? (I realise you may not want to buy at the moment).

Depends. If you’re paying that much because you just want a particularly glamorous rental - possibly. If you’re paying that much for a fairly basic family home in a particularly expensive area of the country - probably not.

We pay circa 1300 for a three bed (two and a half really) unexciting semi in a cheap part of town that allows us to commute. Sadly my ovaries weren’t up to the financial timescale that would have possibly allowed us to buy and we made the decision that having our dd was the more time sensitive goal.

We did get particularly shafted in the last recession though which wiped out our first attempt at saving a deposit.

Good times.

What. The Fucking. Hell?

So basically people in longterm tenancies will start to pay tax ON THEIR RENT?

That's what the article says, anyway. In the eg in the article, tax will become due in year 5 of the tenancy.

Because life for renters wasn't insecure and expensive enough...

@slipperywhensparticus it only goes over 7 years so unless your rent is over £1500 per month you don't need to worry

Another way of shafting the poor.
Plenty of people can afford to pay rent, but are unable to obtain mortgages- lack of deposit is the main reason.
It's criminal to tax the tenant. Tax the landlord more on the money they receive, surely?

Another way of shafting the poor.

I don't know about "poor" in this case tbh. Unless we are talkinga bout lifelong tenants but i assume taht since no one mentioned it anywhere really, social housing might be extempt?

What happens if you rent the same place for 20 years ? We couldn't afford to buy due to a variety of reasons, not least the house prices hiking by over 100% in the short window of opportunity we may have had.
What I would like to know is do you pay the tax on your tenancy as you would PAYE monthly , so added to your monthly rent , or will you just be landed with a big tax bill and penalties if you are unaware of this rule ?

Will HA's and Councils with long term tenants have a duty to inform their tenants of this ?

I am bit confused as I would expect shelter to cover this yet can't find it on their website

SDLT is calculated across the total time a Tenant takes a tenancy for, up to a maximum of seven years. If a tenant takes a one year tenancy and exercises an option to renew for a further year, this will be considered by the Inland Revenue to be a linked transaction and the NPV calculation will be based on the gross rent paid for both years. The SDLT will be recalculated at he start of the second year, taking the rent and SDLT paid for the first year into consideration. If the Tenant takes a tenancy for one year, and continues to occupy the property at the end of that term on a monthly basis, the Inland Revenue will presume that this is also a linked transaction and will calculate the SDLT on the presumption that the Tenant will spend another full year in the property. The NPV calculation will be for the full two years

So if your tenancy is a secure one, where you do not sign a new agreement every year , as long as the total rent over 7 years doesn't exceed £125,000 you will not be eligible to the tax ?