How does it work?
Stamp Duty Land Tax (SDLT) is a tax applied to residential properties bought in England and Northern Ireland, over £125,000 (unless you are a first time buyer). Second homes and buy-to-let properties are also subject to a Stamp Duty tax.
Please note, different SDLT rates and thresholds apply to non-residential property or mixed use land. Residential property purchases in Scotland and Wales are also governed by different transaction taxes.
Use our calculator to work out how much Stamp Duty you’ll need to pay on the property you’re purchasing, or on a second home or buy-to-let (these attract an extra 3% charge).
The calculator and commentary is for general interest only and must not be relied on. It may not be up to date or complete, relates only to certain types of residential property in England or Northern Island and does not constitute advice. Please speak to us for help and advice relating to your specific financial circumstances.
When is Stamp Duty paid?
When buying a property over £125,000, stamp duty is payable to the HMRC 30 days from the date of completion on your purchase, or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don't miss the deadline. Some buyers prefer to add the Stamp Duty amount to their mortgage loan. We can advise you on the best approach for your circumstances.
Who pays Stamp Duty?
Stamp Duty is paid by everyone purchasing a residential or non-residential property in England and Northern Ireland, including overseas buyers, corporate bodies and non-natural persons.
I am a first time buyer. How does Stamp Duty affect me?
If you are a first time buyer purchasing your first home for £300,000 or less, you will not pay SDLT. If your property is priced over £300,000 but does not exceed £500,000, you will pay 5% on the amount above £300,000.
The relief applies to purchases in England and Northern Ireland. In Wales, the Land Transactions Tax replaced SDLT from 1 April 2018. The Scottish Government’s Land and Buildings Transaction Tax came into force on 1 April 2015, replacing SDLT for land transactions in Scotland.
How much stamp duty will I have to pay when buying a residential property?
The Stamp Duty Tax Rates as of December 2014 for residential properties are:
|£0 to £125,000
|£125,001 to £250k
|£250,001 to £925k
|£925,001 to £1.5m
How to calculate the Stamp Duty rate
- Property purchase price: £850,000.
- There is no Stamp Duty Tax applied to the first £125,000
- 2% applied on £125,000 to £250,000
- 5% above £250,000.
- i.e: £800,000 - £250,000 = £600,000 x 0.05 = £30,000 + £2,500 = £32,500.
As the property price increases, the rate of pay increases within a certain tax bracket, with percentages rising when a higher price threshold is reached. Under the new SDLT, property between £925,000 and £1.5m will be taxed at a rate of 10%, compared with 5% in 2014.
Buy-to-let and second homes Stamp Duty 2018
From April 2016, property buyers of buy-to-lets and second homes in England and Wales have had to pay an additional 3% on each stamp duty band.
Buy-to-let and second home Stamp Duty tax bands
|Brackets||Standard rate||Buy-to-let/second home rate (April 2016)|
|Up to £125,000
|£125,001 to £250,000
|£250,001 to £925,000
|£925,001 to £1.5m
Can I reduce Stamp Duty?
Stamp Duty is only payable on the land purchase, so removable fixtures and fittings, such as freestanding wardrobes, sofas, fridges, carpets and curtains, are not subject to SDLT and can, therefore, be subtracted from the total property price. Everything 'attached' to a property such as light switches technically form part of the property and are subject to SDLT.
If a seller is willing to leave certain fixtures and fittings, you should agree to pay a reasonable amount between yourself and the vendor and subtract it from the agreed purchase price. A Tax Lawyer or Conveyancer can help you with this.