What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a fee, charged by the Government, when you buy a new residential home in England, whether brand new or pre-owned.
Your solicitor will usually calculate and pay your stamp duty on your behalf, although this is also something you can do yourself.
How much will I have to pay?
Over the last couple of years, there have been a series of updates to Stamp Duty thresholds.
Most recently, on 23rd September 2022, it was announced as part of the Autumn Budget that zero stamp duty was payable on homes less than £250,000 - an increase from £125,000.
First Time Buyers will benefit from stamp duty relief on properties up to the value of £425,000 for homes outside of London, with a higher threshold of £625,000 for homes in London.
Stamp Duty Tax Rates
| Tax Band | Normal Rate | Additional Property |
|---|---|---|
| less than £250K | 0% | 3%* |
| £250k to £925k | 5% | 8% |
| £925k to £1.5m | 10% | 13% |
| anything over £1.5m | 12% | 15% |
*An additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £250k the SDLT rate will be 3% on full purchase price.
Do you already own a home?
If this isn't your first home and you're buying as an investment property, you can expect to pay higher rates. This usually means that an extra 3% is added to the standard stamp duty tax bands on properties costing more than £40,000 at the relevant rate at that time. This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
Investors, or those purchasing a second home, still qualify for savings following the Government offering stamp duty relief and will currently pay only 5% on properties ranging from £500,000 to £925,000 compared to 8%.
Example
If buying a property for £600,000:
Until 30th June 2021 - £23,000
From 1st July 2021 - £38,000
Overseas buyer?
From 1 April 2021, if you’re a non-UK resident buying a residential property in England or Northern Ireland, you will have to pay an additional 2% on top of the existing Stamp Duty rates for properties costing more than £40,000.
Find out more about rates of Stamp Duty for non-UK residents on the GOV.UK website.
