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What is Stamp Duty?
Stamp Duty is a tax on residential properties costing more than £125,000, unless you qualify for first time buyers relief.
How is Stamp Duty calculated?
It’s calculated in a similar way to income tax – you’ll pay on each part of the house’s value that falls into different bands. So, if you bought a house for £350,000, you’d pay:
- Nothing on the first £125,000
- 2% on the next £125,000 (up to £250,000) = £2,500
- 5% on the final £100,000 (up to £375,000) = £5,000
The total to pay would be £7,500.
The government has a calculator to help you find out what it may cost.
First time buyers' relief
If you're a first time buyer in England or Northern Ireland, you won’t have to pay stamp duty on the first £300,000 of a property's purchase price due to first time buyer’s relief. You will pay 5% on the portion between £300,001 up to £500,000.
If you’re paying more than £500,000, you won’t be eligible for first time buyer’s relief and you’ll pay the same rates as someone who has bought a house before.
Learn more about stamp duty for first time buyers.
Paying Stamp Duty
When do you have to pay Stamp Duty?
You have 14 days to pay it after completion. Your conveyancer should handle the payment to HMRC, but it’s worth checking. If you don’t submit a return and pay the tax within 14 days, HMRC might charge you penalties and interest.
Can you add Stamp Duty to a mortgage?
Depending on your lender, you may be able to borrow more to cover stamp duty. Halifax don’t lend to cover the payment, and you’ll need to have the money available to pay this separately.
Handy to know
You may have to pay a higher tax rate if you get the keys to your new home before selling your current one. If so, you can apply for a refund on the government website once your home has been sold.
Let’s take a closer look
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The rules are generally the same for both freehold and leasehold properties. However, the amount you pay when you buy a leasehold property can depend on if it’s an existing or new lease. Check the government website for further information.
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If you’re buying a second, or an additional home in England or Northern Ireland, you may have to pay a higher rate of Stamp Duty. Additional rates apply in Scotland and Wales. This also applies to buy to let properties and holiday homes. It doesn’t apply to caravans, mobile homes or houseboats.
If you live in Wales or Scotland, the rate of tax you pay on buy to let properties is different. We have more information about the rates and general buy to let advice.
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If you're buying in England or Northern Ireland, stamp duty applies to homes that cost more than £125,000. If you’re a first time buyer, it applies to homes that cost more than £300,000.
If you live in Wales, you’ll have to pay Land Transaction Tax (LTT) on homes that cost more than £225,000.
In Scotland, this is called Land and Buildings Transaction Tax (LBTT) and is paid on homes that cost more than £145,000. If you’re a first time buyer, it applies to homes that cost more than £175,000.
Check out the latest Government Stamp Duty rates.
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