Buying a new home

What is stamp duty?

Who pays stamp duty?

Stamp Duty Land Tax (SDLT) is paid if you're buying a house worth over £125,000 in England and Northern Ireland. If you're in Scotland it's known as Land and Building Transaction Tax (LBTT) and it applies to purchases of £145,000 or more. In Wales, properties worth less than £180,000 do not pay any stamp duty.

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 is stamp duty?

UK stamp duty rates have changed over the years. Currently, the amount you have to pay will depend upon the price threshold in place in your area - there are different rates in England and Northern Ireland compared to Scotland and Wales. 

You may be eligible for stamp duty relief as a first time buyer, or liable for a surcharge if you're buying a second property.

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Stamp duty calculator

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

How do I pay for Stamp Duty?

Your solicitor will usually calculate, collect and pay stamp duty owned on your behalf, but it's legally the buyers' responsibility to make sure it's paid on time.

It is possible to add stamp duty to your mortgage, but it's important to note that this will incur interest over the duration of the mortgage term, and will also affect your loan to value ratio (LTV).

Stamp duty for first time buyers and second homes

First time buyer stamp duty

Stamp duty relief

First time buyers are not charged stamp duty on the first £300,000 of homes worth up to £500,000

A reduced rate of 5% will then be due on any proportion between £300k and £500k in England and Northern Ireland

In Scotland, first time buyers are not charged LBTT on the first £175,000 of homes worth up to £250,000.

Second home stamp duty

Stamp duty surcharge

This additional rate is applicable to rental properties, second homes and holiday homes

If you are buying an additional residential property, you have to pay additional stamp duty, the rates of which depend on the purchase price and location

An additional 3% stamp duty will be charged unless the property costs less than £40,000.

Buy to let stamp duty

In 2016, the government introduced laws meaning that anyone purchasing an additional property has to pay an increased stamp duty tax. As a result, the majority of buy to let home purchases now come with an additional 3% stamp duty fee.

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