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What is Stamp Duty Land Tax?
Stamp duty is a tax that is levied on certain on the purchase of property or land over a certain price. The amount of stamp duty that is payable depends on the value of the property you're buying, whether or not you're a first-time buyer, if the property is your main residence, and where in the UK you're buying.
How much Stamp Duty will I pay?
The amount of stamp duty you pay varies based on the situation
The amount of stamp duty you'll need to pay varies based on:
- Whether or not you’re a first-time buyer
- If you already own a property and you’re buying an additional property
- Where in the UK you're buying
- Whether or not you’re a UK resident
In September 2022, changes were announced to the way in which Stamp Duty is calculated. These changes will mean that, for most people, the amount of Stamp Duty they pay will be lower than it would have been under the old rules.
The tables below show the new rates of Stamp Duty:
Stamp duty in England and Northern Ireland (from September 2022)
Portion of Property Price | Tax Rate (Primary residence) | Tax Rate (Additional Property) |
---|---|---|
Up to £250,000 | 0% | 3% |
Between £250,001 to £925,000 | 5% | 8% |
Between £925,001 to £1.5 million | 10% | 13% |
More than £1.5 million | 12% | 15% |
First Time Buyer Stamp duty in England and Northern Ireland (from September 2022)
Portion of Property Price | Tax Rate (Primary residence) |
---|---|
Up to £425,000 | 0% |
Between £425,000 to £625,000 | 5% |
More than £625,000 | If the price is over £625,000, you cannot claim the relief. |
Stamp duty in Wales (from 10th October 2022)
(Unlike England, Wales has no special threshold for first-time buyers.) | ||
---|---|---|
Portion of Property Price | Tax Rate (primary residence) | Tax Rate (Additional property) |
Up to £225,000 | 0% | 4% |
Between £225,000 to £400,000 | 6% | 10% |
Between £400,000 to £750,000 | 7.5% | 11.5% |
Between £750,000 to £1.5 million | 10% | 14% |
More than £1.5 million | 12% | 16% |
Stamp duty in Scotland
Portion of Property Price | Tax Rate (primary residence) | Tax Rate (Additional Property) |
---|---|---|
Up to £145,000 (£175,000 for first-time buyers) | 0% | 4% |
Between £145,000 to £250,000 | 2% | 6% |
Between £250,001 to £325,000 | 5% | 9% |
£325,001 to £750,000 | 10% | 14% |
Over £750,000 | 12% | 16% |
When do you pay stamp duty?
Stamp duty is payable within 14 days of completion of your house purchase. Your solicitor or conveyancer will calculate what you owe, compile your return and make the payment for you as part of their service.
Do first-time buyers pay stamp duty?
Yes, there are variations in stand duty land tax throughout the countries of the UK.
In England and Northern Ireland, first-time buyers pay no stamp duty on the first £425,000 of the property price. On any portion between £425,000 to £625,000, they pay 5%.
For example, on a £500,000 purchase, first-time buyers would pay no stamp duty on the first £425,000, and 5% on the remaining £75,000 – which comes to a total of £3,750.
For a first-time buyer buying a house worth more than £625,000, there is no relief and they will pay the full amount of stamp duty.
In Wales and Scotland, different rules apply. In Wales, there is no dedicated relief for first-time buyers, however, there is no tax payable on any property up to £225,000 assuming it's your primary residence.
In Scotland, first-time buyers pay no tax on the first £175,000 of the property price. On any portion between £175,000 to £250,000, they pay 2%. For example, on a £200,000 purchase, first-time buyers would pay no tax on the first £175,000 and 2% on the remaining £25,000 - which comes to a total of £500.
Stamp duty for second homes and buy to let
If you are buying a property as a second home or a buy-to-let investment, in England and Northern Ireland you will be subject to a 3% surcharge on each stamp duty band. This means that you will pay more stamp duty overall.
For example, if you're buying a primary residential home you'll pay no stamp duty land tax on the first £250,000 of the property price, and then 5% between £250,000 to £925,000.
When buying a second home, the 3% surcharge will apply to each band, and you'll pay 3% on the first £250,000 of the property price, 8% between £250,001 and £925,000, 13% between £925,001 and £1.5 million and 15% on anything over £1.5 million.
In Wales and Scotland, there is a 4% surcharge on second homes.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.