Asif is buying a £350,000 home in England through an ijara plan, with the bank buying the property and leasing it to him. He is not a first-time buyer and will own no other home. Using SDLT rates from 1 April 2025, how much SDLT is payable on the arrangement in total?
SDLT alternative property finance relief (Finance Act 2003 s71A and s73) stops SDLT being charged twice, so the tax matches a conventional mortgage purchase (HMRC SDLT Manual SDLTM28005). Standard rates from 1 April 2025 (gov.uk): 0% on £125,000, 2% on the next £125,000 = £2,500, 5% on £100,000 = £5,000, total £7,500. £15,000 charges both the bank's purchase and the lease to Asif, £2,500 applies first-time buyer relief, which he does not qualify for, and £0 assumes Islamic finance is exempt.
Thinking SDLT is charged twice, or not at all, on Islamic home finance.
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