If you're buying a house, the stamp duty is a significant cost to consider. We look at the latest stamp duty threshold announced by the chancellor, Kwasi Kwarteng, on 23 September in his 'mini-budget' to help you work out how much it will cost you to buy your next home.
Working out a potential stamp duty bill yourself can be complicated – so an easy way to work out how much you could be liable on your property purchase is to use our stamp duty calculator.
Stamp duty calculator
Note: This calculator is not suitable for first-time buyers, those buying non-residential land or property or non-UK residents
What is stamp duty?
Stamp duty is a tax you pay when you buy property or land over a certain limit.
There’s no single fixed rate – as rates are tiered depending on the price you pay for your property. There are also allowances for first time buyers along with higher rates charged for those buying second homes - which can be up to 15% - compared with the standard maximum 12% rate.
While often referred to as stamp duty – its proper name is Stamp Duty Land Tax (SDLT) – which is payable in England and Northern Ireland.
However in Scotland it’s known as Land and Buildings Transaction Tax (LBTT) and in Wales it’s called Land Transaction Tax (LTT). Both Scotland and Wales have different rules on stamp duty thresholds and payment.
Who pays stamp duty?
It’s the buyer who pays any stamp duty due - and in England and Northern Ireland you can be liable for stamp duty if you are:
- Buying a freehold property
- Buying a new or existing leasehold property
- Buying property through a shared ownership scheme
- If property or land is transferred to you in exchange for payment – say you take on a mortgage or buy a share in a house
For stamp duty purposes it doesn’t matter if you’re buying a property outright or taking on a mortgage.
If any stamp duty is payable – when it comes to settling up – you will need to make payment to HMRC within 14 days of completion along with a stamp duty land tax return. With the equivalent of stamp duty in Scotland and Wales you have 30 days to make payment.
However if you use a solicitor to handle the property purchase – they will usually organise this for you and any stamp duty payable is often included as part of their bill.
If the correct stamp duty isn’t paid or payment is late – you can face a fine from HMRC.
How much is stamp duty?
There’s no ‘one size fits all’ when it comes to stamp duty.
Following the chancellor's mini-budget, first time buyers now don’t have to pay stamp duty on the first £425,000 of a property (up from £300,000) – providing the price is £625,000 or less (previously, it was £500,000).
And if you’re not a first time buyer – but still buying a residential property that’s going to be your main home – then there is no stamp duty to pay on the first £250,000 - up from £125,000 following the mini-budget on 23 September.
Stamp duty is charged at different rates depending on the price of the property you buy.
And worth knowing for stamp duty purposes it’s the property transaction price that counts - not the original market price.
- up to £250,000 - you pay 0% on the portion within this band
- From £250,001 to £925,000 – you pay 5% on the portion within this band.
- From £925,001 to £1.5 million – you pay 10% on the portion within this band.
- Beyond £1.5 million – you pay 12% on the portion within this band.
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