The home buying process

Stamp Duty

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is paid if you're buying a house for over £125,000 in England, Wales and Northern Ireland. if you're in Scotland it's known as Land and Building Transaction Tax (LBTT) and it applies to purchases over £145,000.

If you're buying a rental property or second home, you may have to pay an extra 3% in Stamp Duty or LBTT. Different rates apply for commercial property.

How much will it cost?

The amount you have to pay will usually be based on the purchase price, and you won't pay any tax on the first £125,000 of the sale. So long as you're not purchasing a second property (for example a second home or buy to let property), there will be no Stamp Duty at all on anything valued below that £125,000 figure.

Stamp Duty rates range from 2%-12%, you can find out the exact amount you may have to pay on the property you're buying using the Stamp Duty calculator from HMRC.

Costs for first time buyers and second homes

First time buyers

First-time buyers are not charged Stamp Duty on the first £300,000 of homes worth up to £500,000

They only have to pay 5% on any proportion between £300k and £500k in England, Wales and Northern Ireland.

Buying a second home

If you are buying an additional residential property in England and Wales, including rental properties, second homes and holiday homes, you have to pay an extra 3% Stamp Duty, even if the purchase is under the £125,000 threshold

In Scotland you have to pay an extra 3% LBTT unless the property costs less than £40,000.

How do I pay for Stamp Duty?

With any big purchase, it's important to work out your budget. It's best not to borrow more money on your mortgage to cover Stamp Duty, as this could affect your loan to value ratio. 

It's a good idea to make sure you have the cash to pay for Stamp Duty before you make an offer on a property. You can use our budget calculator to see how to cover this cost.

Your solicitor will usually calculate and collect the Stamp Duty in advance, but it's legally the buyers' responsibility to make sure it's paid on time.

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