Stamp Duty: Your Guide

When buying a house there are extra costs in addition to the deposit and mortgage – one of which is Stamp Duty Land Tax (SDLT).

Stamp Duty is a lump sum tax that you have to pay on completion of a residential property purchase.

How much is stamp duty?

Following the coronavirus pandemic and the resulting economic impact, chancellor Rishi Sunak announced a Stamp Duty holiday. It meant there was nothing to pay on properties worth up to £500,000 until 30 June 2021.

From 1 July, Stamp Duty kicked in for properties above £250,000. It was cost 5% from that price up to £925,000.

Until 1 October, there will then be no Stamp Duty on homes worth up to £250,000. From then, normal rates will apply.

Normal Stamp Duty rates are as follows: 

  • Up to £125,000 – 0%
  • Over £125,000 up to £250,000 – 2%
  • Over £250,000 up to £925,000 – 5%
  • Over £925,000 up to £1.5 million – 10%
  • Over £1.5 million – 12%

For buy-to-let and second home purchasers, there will be an additional 3% on top of normal rates to pay.

The GOV.UK website has a handy stamp duty calculator

Your conveyancer should discuss stamp duty with you and if your circumstances are particularly complex you may wish to consult a specialist tax advisor.

Until 31 March 2021, Wales' Land Transaction Tax will be as follows:

  • Up to an including £250,000 – 0%
  • Over £250,000 to £400,000 – 5%
  • Over £400,000 to £750,000 – 7.5%
  • Over £750,000 to £1.5 million – 10%
  • Over £1.5 million – 12%

In Scotland Land and Buildings Transaction Tax (LBTT) is payable. As above, it is a banded system. Until 31 March 2021, the bands are:

  • Up to £250,000 purchase price – 0%
  • Over £250,000 to £325,000 – 5%
  • Over £325,000 to £750,000 – 10%
  • Over £750,000 – 12%

How and when you pay stamp duty

  • UK and Northern Ireland
    Once you have completed the purchase of your property you have 30 days to complete an SDLT return for HMRC and pay the tax.
  • In Scotland you pay LBTT to Scotland Revenue within 30 days of completion.
  • Welsh residents should pay LTT to the Welsh Revenue Authority within 30 days after the day of completion.

Your conveyancer can deal with this for you to save you the added stress. This should be done on the day of completion and the amount payable should be shown in your conveyancer’s completion statement to you.

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Note: First4Lawyers offers this information as guidance, not advice. Before taking any action, you should seek professional assistance tailored to your personal circumstances and not rely on First4Lawyers’ information alone.

All details and pricing are correct at time of last update. First4Lawyers and their partners are not tax advisors and we recommend you seek appropriate independent financial advice before making any decisions that relate to tax and property.

Get in touch today to discuss your requirements 08005677866

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