When you buy a home, stamp duty is a major cost you need to factor in. But what is stamp duty and how much does it cost?
Put simply, stamp duty is a tax you need to pay when you buy a home. It is known as Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Tax in Scotland and Land Transaction Tax in Wales.
Recent changes to the levels of stamp duty were made legal in February 2023, which reduces the amount of stamp duty for buyers up until March 2025. So how much is stamp duty in the UK? Let’s take a look.
ENGLAND AND NORTHERN IRELAND
In England and Northern Ireland, the current rates are as follows:
PURCHASE PRICE
RATE ON MAIN RESIDENCE
RATE FOR ADDITIONAL PROPERTIES
Up to £250,000 (£425,000 for first-time buyers)
0%
3%
£250,001 – £925,000
5%
8%
£925,001 – £1,500,000
10%
13%
£1,500,001 +
12%
15%
How much you pay depends on the value of the house you’re buying, your buying status, and whether or not it’s your main residence.
If you are a first-time buyer, you don’t pay stamp duty at all for homes worth £425,000 and under. If you’ve owned property before and aren’t classed as a first-time buyer, you only start to pay stamp duty on the value of the property over the first £250,000. Things are a little different if you’re buying an additional property as you can see from the table above.
HOW TO WORK OUT STAMP DUTY
Say, you buy a home worth £200,000 you don’t pay any stamp duty at all.
If the property is worth £450,000 (and you’re not a first-time buyer), you pay 5% on the value above the first £250,000. In this case that would be a total of £200,000 – 5% of this £200,000 would then come in at £10,000.
For a property worth £300,000, you would pay stamp duty for the £50,000 above the £250,000 threshold. Your stamp duty would therefore be £2,500.
Things can get a little more complicated for properties that cover more than one threshold. For a property worth £1 million, your stamp duty calculations would work as follows:
First £250,000 – £0
The value between £250,001 & £925,000 = £674,999. 5% of this equates to £33,749.95
The value between £925,001 & £1,000,000 = £74,999. 10% of this equates to £7,499.9
The total stamp duty you will need to pay = £41,249.85
SCOTLAND
In Scotland, the land and buildings transaction tax rates are as follows:
PURCHASE PRICE
RATE ON MAIN RESIDENCE
RATE FOR ADDITIONAL PROPERTIES
Up to £145,000 (£175,000 for first-time buyers)
0%
4%
£145,001 – £250,000
2%
6%
£250,001 – £325,000
5%
9%
£325,001 – £750,000
10%
14%
£750,001 +
12%
16%
WALES
In Wales the land transaction rates are:
PURCHASE PRICE
RATE ON MAIN RESIDENCE
RATE FOR ADDITIONAL PROPERTIES
Up to £225,000
0%
4% (on the portion up to £180,000)
7.5% (on the portion between £180,001 and £250,000)
£225,001 – £400,000
6%
9%
£400,001 – £750,000
7.5%
11.5%
£750,001 – £1,500,000
10%
14%
£1,500,001 +
12%
16%
WHAT IF YOU'RE A FIRST TIME BUYER?
If you’re a first-time buyer, there is a higher threshold before you need to pay stamp duty (or its equivalent in Scotland or Wales). The first-time buyer thresholds are:
Up to £425,000 in England and Northern Ireland
Up to £175,000 in Scotland
Up to £225,000 in Wales (this is the same threshold for all buyers)
WHO PAYS STAMP DUTY?
As the buyer of the property, you will be liable to pay the stamp duty. However, in most instances the payment will be handled by your solicitor on your behalf.
WHEN DO YOU PAY STAMP DUTY?
In England and Northern Ireland, you have 14 days from the completion date (when you get the keys and can move in) to pay your stamp duty. For properties in Scotland and Wales, this must be paid within 30 days of the completion date. If you don’t pay it, you could be liable for a fine.
In most cases your solicitor will pay it for you and will do so immediately upon completion. Often your solicitor will request that you transfer all required funds to them before you complete (including your deposit, solicitors fees and stamp duty) to make sure everything is in order.
You can learn more about the ins and outs of stamp duty with our detailed guide. And get in touch with us today to discover our new homes located across the UK.
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