Last updated , by Jay Woods

This glossary of stamp duty terms has drawn heavily on official documentation (including Scottish guidance where relevant) as its primary source - more details of this are found within some definitions and more generally, at the foot of this page.

Note: For a free, downloadable (and printable) e-book version of this glossary, scroll to the bottom of this page and click (or tap) the orange button!

Additional Dwelling Supplement (ADS) (Scotland-only) A simple, additional 3% in Land and Buildings Transaction Tax levied on the Relevant Consideration of any property transaction entailing the acquisition of additional dwellings, i.e., Buy to Let properties and Second Homes, of £40,000 or more.

If the entire transaction consists of a Second Home or Buy to Let purchase, then all of the transaction is subject to ADS.

ADS generally only applies to residential transactions (Source: Official Scottish guidance on LBTT).

As of 1st April 2016, ADS is also automatically levied when a non-natural person (i.e. a company or most forms of trust) buys a property.

Source: Official online guidance on ADS.

Note: The Full LBTT Calculator accommodates the Additional Dwelling Supplement.
ADS See Additional Dwelling Supplement.
Approved Qualifying Body In the context of SDLT on Shared Ownership Schemes, this is a public sector body of one of the following types: (List cited verbatim from the official guidance on shared ownership property.)
Assigned Lease For the purposes of SDLT, this is where a property transaction entails the acquisition of a still-running lease (as opposed to a new lease).

It is subject to essentially the same SDLT treatment as the acquisition of a Freehold property is - the rates and bands for this are covered on the Stamp Duty Rates page.

Note: The Full Stamp Duty Calculator has a facility for calculating SDLT on assigned leases.
Buy to Let Transactions entered into with the aim of the buyer letting the property, rather than occupying it or using it as a Main Residence or Second Home, are termed "Buy to Let".

SDLT on such property purchases is generally the same as that for second homes, i.e., a higher rate of an additional 3% per tax band is applied - see the table on the Stamp Duty Rates page.

Note: The Full Stamp Duty Calculator accommodates buy to let in SDLT calculations.
Chargeable Consideration Normally the amount of money agreed between the seller and buyer in a property transaction, but occasionally also including goods, services, release from debt or taking on debt, or a combination of cash plus some of those non-cash modes of payment.

Where VAT is paid on the transaction, that too is deemed part of the chargeable consideration.

Source: Official documentation on chargeable consideration.
Completion Date Date on which a property is formally transferred from the seller's ownership to the buyer's ownership.

In Scotland this is often termed the Date of Entry (or some similar variation thereof).
Connected Person(s) In the context of SDLT / LBTT, the government defines a connected person as:
  • a relative (through blood, marriage or civil partnership), or,
  • the relative of a relative as defined above, or,
  • a business partner, or,
  • a business partner's relatives, or,
  • a company / connected group(s) of companies.
The objective is to prevent any property buyer from arranging property transactions in such a fashion as to minimise SDLT / LBTT liability, given the higher rates (that is, more lucrative from the Treasury's perspective) that larger or combined transactions are subject to.

Source: Official documentation on linked purchases.
Consideration See Chargeable Consideration.
Contingent Consideration This is the Chargeable Consideration that will only be paid by the buyer when a future condition becomes fulfilled.

In the interim, the buyer is automatically liable for SDLT on the contingent consideration, based on the assumption that the future condition will indeed be fulfilled, although payment of that element of the total SDLT due may be deferred upon the buyer's application.

See also Uncertain Consideration.
Date of Completion See Completion Date.
Date of Entry Common Scottish term for the date on which the buyer of a property pays the seller and in return assumes formal ownership of the property.

Source: MOV8's "Scottish Property Guide".
Date of Settlement See Date of Entry.
Deferred Payment(s) See commentary with Contingent Consideration and Uncertain Consideration.
Effective Date Normally, in the context of SDLT, this will be the Completion Date.

However, it may alternatively be brought forward to the date of “substantial performance”, which means one of the following occurs prior to the Completion Date:
  • Most (usually 90%) of the Chargeable Consideration is paid, or,
  • The buyer by some legal means becomes entitled to assume possession of the property, or,
  • The first rent payment (in the case of Leasehold transactions) occurs.
Source: Official guidance on online SDLT returns.
Existing Lease See Assigned Lease.
Freehold Legal term meaning that a property and the land it sits on (along with garden space) is effectively in the “full” ownership of the titleholder, albeit subject to certain limitations relating to the Crown's ultimate and superior ownership of it.

For the converse, see Leasehold.
Grassum Antiquated, but still used Scottish term for Lease Premium.
Land and Buildings Transaction Tax (LBTT) Scotland-only, self-assessed, compulsory tax due on most property transactions from 1st April 2015 when it wholly replaced Stamp Duty Land Tax (which remains in place in the rest of the UK).

Note 1: LBTT has different rates and bands than SDLT. For tables of the current LBTT rates, see the Stamp Duty Rates page.

Note 2: To automatically calculate LBTT, see the Full SDLT & LBTT Calculator.
Land Transaction Tax (LTT) This will be a Wales-only, self-assessed, compulsory tax due on most property transactions in Wales, from April 2018 when it is due to wholly replace Stamp Duty Land Tax.

Its most notable projected key difference from SDLT is an exemption for the rental component of new lease transactions (whereas SDLT taxes this via the Net Present Value treatment).

Source: Official Welsh Government Documentation.

NOTE: For fuller details of the tax and to perform LTT calculations now (standard, residential rates), see the Land Transaction Tax Calculator.
LBTT Abbreviated form of the term, Land and Buildings Transaction Tax.
Lease for Life A lease of indeterminate end date, and NOT a 90 year term as used in other contexts of “lease for life”.

Source: Official Stamp Duty Land Tax Manual's page on term of a lease.
Lease Premium Payment - in cash or something in lieu of cash, such as labour - made to a landlord when a lease is granted.

It is subject to SDLT at the rates shown on the Stamp Duty Rates page.
Leasehold Legal term meaning that a property and the land it sits on (along with garden space) is largely in the “full” ownership of the Leaseholder (insofar as they may dwell there for the duration of the lease which is typically of the order of 99 to 999 years), albeit subject to an annual ground rent payment to the freeholder (i.e. the party who holds title on a Freehold basis to the actual land on which the property sits).

Note for Scotland:
"leasehold title which is common in England and Wales is extremely rare in Scotland"
(Cited from: REVENUE.SCOT's website's guidance on LBTT exemptions and reliefs).
Leaseholder Person who possesses title to a property under Leasehold terms.
Linked Purchase / Transaction Official documentation defines this as follows:
"When 2 or more property transactions involve the same buyer and seller, they count as 'linked' for SDLT."
(Cited from: Official guidance on linked purchases).

Note also that for SDLT / LBTT purposes a Connected Person may be construed as the de facto buyer and expected to pay relevant SDLT / LBTT accordingly.

SDLT / LBTT is due on the total value of all linked transactions, which raises the prospect of the buyer paying a higher rate of SDLT / LBTT than would be the case if the transactions were not linked. Naturally, therefore, the government enjoins countermeasures against erstwhile remedies to circumvent the heavier levies on linked transactions - more on this in the final paragraph in this definition.

If all the linked properties are Residential, then their combined value is subject to SDLT at residential rates (shown on the Stamp Duty Rates page).

However, if one, all, or any number between, of the linked properties are Non-Residential, then their combined value is subject to SDLT at non-residential rates.

If any of the linked properties is located in Scotland, it cannot be considered 'linked' for SDLT purposes.

As mentioned above, the government has legislated to make it difficult for buyers to avoid the linked transaction treatment, so measures such as the buyer invoking proxies to purchase extra properties within a single scheme or project will still be construed as the original buyer buying them; likewise using separate contracts or attempting to divide the acquisition into disparate parts will be of no avail.
LTT Abbreviated form of the term, Land Transaction Tax.
Main Residence For the purposes of SDLT, this refers to the buyer's primary home in which they have been resident for the 12 month period immediately prior to any SDLT liable transaction.
Market Value Election This is where a buyer acquiring a property through a Shared Ownership scheme opts to pay SDLT (based on the property's current market value) in a single instalment at the Residential rate, as opposed to paying it in stages.

This option ensures that no further SDLT payments are required in the future, even if the buyer subsequently purchases an increased share of the property, right up to 100% ownership (although the buyer must still complete an SDLT return in such instances).

Official tax guidance advises:
“You must decide if a market value election is your best option. It’s often best to do this when the total market value of the property is no more than the SDLT threshold for paying SDLT.”
(Cited from: Official guidance on shared ownership).

Note that if the buyer acquires the property's Freehold - which is possible even if the buyer's share is less than 100% of the total - the buyer must pay SDLT on the full market value of the freehold.

Otherwise (i.e. the buyer does NOT acquire the right to freehold), the buyer must pay SDLT on the “open market premium”, which is the price the buyer would have to pay for the largest permissible share of the property the buyer could purchase under the lease's terms.

In the event that the buyer exercises the right to buy the largest share possible, the buyer will additionally have to pay SDLT on the Net Present Value of the rent over the term of the lease if that rent totals “a large amount”.
Mixed Use Property This is a property that features both Residential and Non-Residential elements, for example, a ground floor retail premises with an apartment above it.

For SDLT purposes, such acquisitions are treated as though they are wholly non-residential.

Note: The Full Stamp Duty Calculator accommodates mixed use transactions in SDLT calculations.
Net Present Value (NPV) In the context of SDLT, this is a projection, adjusted for inflation, of all the rent due over the duration of a lease.

For SDLT it is calculated somewhat differently for leases lasting five or less years than it is for those that exceed five years. In the former case, the formula is relatively simple, but it becomes considerably more complex in the latter case.

In the case of Non-Residential leases, any VAT due on the rent is to be included for the purpose of calculating NPV - for more, see the official guidance on assigned leases.

For a fully comprehensive treatment - unmatched on the web - of the term and of the formulae used to work it out, see the Stamp Duty Net Present Value page.

Note: To calculate NPV on leases, see the Full Stamp Duty Calculator.
Nominal Rent A miniscule or trivial sum, or even a non-monetary token item, in either instance contractually stipulated in such cases where a landlord wants to let a property on a de facto rent-free basis.

The law requires that property contracts must entail a mutual “consideration” between the parties or else they would be considered null and void. Hence the concept of nominal rent arose to remedy the situation described in the first paragraph.

Note: Occasionally, nominal rent is known as “peppercorn rent”.

New leases which entail a Lease Premium and a nominal rent are subject to SDLT on the premium only. However, if the rent is not nominal, then SDLT will be additionally charged on the rent's Net Present Value.
Non-Residential Property A property, such as office space or land, that is to be normally used for commercial or other non-residential purposes, as opposed to the purposes that Residential Property is used for.

See also Mixed Use Property.
NPV See Net Present Value.
Open Market Premium See commentary with Market Value Election for a brief, contextual definition.
Peppercorn Rent See Nominal Rent.
Postponed Consideration Where it is agreed between the buyer and seller, this is a portion of the Chargeable Consideration that is left unpaid at the time of transfer, on the condition that it be paid at predetermined future date. Under this arrangement, SDLT on the full chargeable consideration is due at the outset.
Relevant Consideration If a house is bought along with, say, a commercial building or farmland, in one broad transaction, the relevant consideration is the amount that applies to the house alone, i.e., typically the price of the house.

Official guidance defines it as:
“the proportion of a chargeable consideration for a transaction that is attributable to the residential element of a transaction”
(Cited from: Scottish guidance on chargeable consideration for the ADS).
Residential Property A dwelling, such as a house or apartment, acquired for the purpose of someone living in it, for example, as the buyer's Main Residence or as a Second Home, or for the purpose of letting it out for another party to live in.

The term also incorporates the grounds of such properties as described in the first paragraph, or land that is qualified (via planning permission) for development into a residential dwelling.

It is antithetical to Non-Residential Property.

Source: Official guidance on leasehold purchases.
SDLT Abbreviated form of the term, Stamp Duty Land Tax.
SDLT - Paying in Stages This is where a buyer acquiring a property through a Shared Ownership scheme opts to pay SDLT in stages, as opposed to paying it as a single instalment at the residential rate.

Initially, the buyer will have to pay SDLT at standard rates on the Lease Premium, plus SDLT on the Net Present Value if the lease stipulates an annual rent that is not Nominal.

No further SDLT is due on any additional share acquisitions until the buyer's total share reaches more than 80% of the property's total, in which case the buyer must submit an SDLT return and pay SDLT on the transaction that breached the 80% threshold, plus any additional transactions.

Note that in this case (i.e. Staircasing until the 80% threshold is breached), all of the buyer's previous share acquisition transactions in connection with the property are considered as Linked Transactions. This does not apply to staircasing that falls short of the 80% threshold.
Second Home For SDLT purposes, this is a residence owned by, and additional to the Main Residence of, the buyer of the subject property.

The government makes no special provision for second home acquisitions by buyers with a main residence abroad.
Shared Ownership (Scheme) This is a formal scheme operated by an Approved Qualifying Body whereby more than one unconnected parties own shares in a Residential Property.

SDLT due in transactions within shared ownership schemes can be paid either in one lump or in stages, the choice being governed by the buyer's future intentions (for example, the wish to buy more shares in the property at a later stage).

See also Market Value Election and SDLT - Paying in Stages.

Source: Official guidance on shared ownership.
Staged Payments In the context of single buyer transactions, see Postponed Consideration.

In the context of Shared Ownership transactions, see Market Value Election and SDLT - Paying in Stages.
Staircasing Somewhat colloquial term for the process or strategy of buying additional shares in a property under a Shared Ownership arrangement.
Stamp Duty Land Tax (SDLT) Stamp Duty Land Tax (SDLT) is a self-assessed, compulsory tax payable by buyers (but not sellers), regardless of their country of residence, on most property transactions, residential or non-residential, freehold or leasehold, in England, Northern Ireland, Wales and, until 1st April 2015, Scotland also (since which date it has been replaced by Land and Buildings Transaction Tax (LBTT).

For tables of the current SDLT rates, see the 2019 Stamp Duty Rates page.

NOTE: To automatically calculate SDLT, see see the Full SDLT & LBTT Calculator.
Substantial Performance See Effective Date.
Term of a Lease The duration of a lease, although this may not necessarily be stipulated in the lease agreement.

For more details, see the official documentation on lease durations.

Also see Lease for Life.
Unascertained Consideration See Uncertain Consideration.
Uncertain Consideration This is Chargeable Consideration that will only be paid by the buyer when a projected, but precisely unquantifiable, future condition becomes fulfilled - the government's example of this is “future payments based on the turnover of a business”.

In the interim, the buyer is automatically liable for SDLT on the uncertain consideration, based on the assumption that the future condition will indeed be fulfilled, albeit based a “just and reasonable estimate” of the uncertain consideration. Payment of that element of the total SDLT due may be deferred, upon the buyer's application.

See also Contingent Consideration.
Welsh Stamp Duty Colloquial form of the term, Land Transaction Tax.


Stamp Duty Land Tax: Official guidance on SDLT at GOV.UK
Land & Buildings Transaction Tax: Official guidance on LBTT at REVENUE SCOTLAND