Stamp Duty
What Is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax paid by everyone when purchasing a freehold, leasehold or shared ownership residential property over £125,000 (or more than £40,000 for second homes) in England, Northern Ireland and Wales.
It is always the home buyer who pays stamp duty and not the seller and your solicitor will in most cases pay this on the buyers behalf after completing a SDLT form.
How much is SDLT?
Buyers usually pay tax on increasing portions of the property price above £125,000 when you buy a residential property. SDLT applies to both freehold and leasehold purchases.
| Purchase price of property | Rate of Stamp Duty | Buy to Let/ Additional Home Rate* |
| £0 - £125,000 | 0% | |
| £125,001 - £250,000 | 2% | 5% |
| £250,001 - £925,000 | 5% | 8% |
| £925,001 - £1,500,000 | 10% | 13% |
SDTT relief for first-time buyers
As of November 2017, there are different rules if you’re buying your first home and the purchase price is £500,000 or less.
You can claim a discount (relief) so you don’t pay any tax up to £300,000 and 5% on the portion from £300,001 to £500,000. You are eligible if you, and anyone else you’re buying with, are first-time buyers.
If the property price is over £500,000 you follow the rules for people who have purchased a home before unless you are purchasing under a Shared Ownership scheme meaning you can claim First-Time Buyers Stamp Duty relief on homes worth up to £500,000. This change applies to homes purchased on or after 22 November 2017.
Stamp Duty for second homes
As of 1st April 2016 there is a 3% surcharge on the purchase price of a property if buying a new residential property means you’ll own more than one. This increased rate applies to properties purchased for £40,000 or more and does not apply to houseboats mobile homes and caravans.
For example, a buyer purchasing a property worth £250,000 will pay the standard Stamp Duty rate which would be 0% on the first £125,000 (£0) and 2% on the remaining £125,000 (£2500). The additional 3% on the total purchase price would be £7500, making the total amount of Stamp Duty payable £10,000.
There are some exceptions to the rule. More information can be found at https://www.gov.uk/stamp-duty-land-tax.
It is possible to apply for a SDLT refund if you sell your previous main residence within three years.
All of our conveyancing quotes include the amount of SDLT in addition to a breakdown of other fees charged by local conveyancers to give you a complete set of costs to budget for. Click here to get an instant quote from local conveyancing companies.