nigel woollsey

Nigel Woollsey

Online Writer
Published: 19/03/2019

At a glance

  • Different stamp duty rates apply depending on several factors, including where in the UK you live, the price of your home, if you are a first-time buyer or if it is a second home or buy-to-let property.
  • Stamp duty must be paid within 30 days of completing the purchase of your property.
  • You only pay stamp duty on the ‘bricks and mortar’ of a property, so if you are paying extra for any white goods or furniture, they are exempt.
  • Stamp duty is not payable if you inherit a property.

Stamp duty (or to use its full title: Stamp Duty Land Tax) is payable by everyone purchasing a property in the UK over a certain value. This is a tax levied by the Government and applies equally to both freehold and leasehold purchases, as well as if you are buying outright or with the help of a mortgage.

 In Scotland this is called Land and Buildings Transaction Tax (LBTT) and in Wales it is known as Land Transaction Tax (LTT).

How much stamp duty do I have to pay?

How much stamp duty you pay is dependent on several factors, including the purchase price of the property, whether you are a first-time buyer, and whether the property will be a leasehold, and is calculated by rates which have been set by the Government. The current (06/04/19) bands for England and Northern Ireland are:

Not a first-time buyer, property is not a second home and not a buy-to-let

Min property purchase price

Max property purchase price

Stamp duty rate (applies only to the part of the property price falling within that band)

£0

£125,000

0%

£125,001

£250,000

2%

£250,001

£925,000

5%

£925,001

£1,500,000

10%

£1,500,000+

-

12%

 

Not a first-time buyer, but property IS a second home and/or IS a buy-to-let

Min property purchase price

Max property purchase price

Stamp duty rate (applies only to the part of the property price falling within that band)

£0

£40,000

0%

£40,001

£125,000

3%*

£125,001

£250,000

5%

£250,000

£925,000

8%

£925,001

£1,500,000

13%

£1,500,000+

-

15%

 

* - Rate applies from £1

First-time buyer rates (and shared ownership mortgages)

Min property purchase price

Max property purchase price

Stamp duty rate (applies only to the part of the property price falling within that band)

£0

£300,000

0%

£300,000

£500,000

5%

£500,001+

-

N/A – Stamp Duty is calculated as if you weren’t a first-time buyer as per the tables above

 

Scotland – Land and Buildings Transaction Tax (LBTT) – At 06/04/19

Min property purchase price

Max property purchase price

LBTT rate (applies only to the part of the property price falling within that band)

£0

£145,000

0%

£145,001

£250,000

2%

£250,000

£325,000

5%

£325,001

£750,000

10%

£750,001+

-

12%

 

Wales – Land Transaction Tax (LTT) for freehold residential transactions – At 06/04/19

Min property purchase price

Max property purchase price

LTT rate (applies only to the part of the property price falling within that band)

£0

£180,000

0%

£180,001

£250,000

3.5%

£250,000

£400,000

5%

£400,001

£750,000

7.5%

£750,001

£1,500,000

10%

£1,500,000+

-

12%

 

Wales – Land Transaction Tax (LTT) for non-residential transactions – At 06/04/19

Min property purchase price

Max property purchase price

LTT rate (applies only to the part of the property price falling within that band)

£0

£150,000

0%

£150,001

£250,000

1%

£250,000

£1,000,000

5%

£1,000,001+

-

6%

 

Wales – Land Transaction Tax (LTT) for second homes or buy-to-let transactions – At 06/04/19

Min property purchase price

Max property purchase price

Stamp duty rate (applies only to the part of the property price falling within that band)

£0

£40,000

0%

£40,001

£180,000

3%*

£180,001

£250,000

6.5%

£250,001

£400,000

8%

£400,001

£750,000

10.5%

£750,001

£1,500,000

13%

£1,500,001+

-

15%

* - Rate applies from £1

Stamp duty example

Let's say you are already on the property ladder and sell this to buy a new property in England or Northern Ireland worth £251,000, you'd pay 2% tax on the amount between £125,001 and £250,000 and 5% stamp duty fees on the £1,000 above the £250,000 limit. Granted, it's still a significant cost, but it'll at least be cheaper than paying 5% on the full £251,000.

However, this is assuming you're not a second home-buyer or landlord. If you are, you'll have to pay an additional 3% surcharge on top of the above rates and from the lower threshold of £40,000.

Cover your costs

It can't be denied that stamp duty can be a significant cost for most buyers, so you'll need to make sure you're prepared for it when you're looking to buy your first home or trade up to a bigger one. You'll need to get your savings in tip-top condition – find the best savings rates to get started – and make sure to keep an eye on typical house prices in your area so you know the kind of stamp duty bill you could be dealing with.

You'll want to get the best possible mortgage deal, too, as this can be a great way to help keep your budget in check. You may even be able to find a mortgage that comes with incentives such as cashback or help towards legal fees, both of which can help minimise upfront costs, and that way, you hopefully won't find stamp duty costs too prohibitive.

Moneyfacts tip

Moneyfacts tip nigel woollsey

Stamp duty in England and Northern Ireland, and other land transaction taxes levied by Scotland and Wales, are often changed by the Government in the Budget. Always check to make sure you know the current rates and who they apply to before calculating how much stamp duty you might be liable to pay on a new property purchase.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

house made from twenty pound notes

At a glance

  • Different stamp duty rates apply depending on several factors, including where in the UK you live, the price of your home, if you are a first-time buyer or if it is a second home or buy-to-let property.
  • Stamp duty must be paid within 30 days of completing the purchase of your property.
  • You only pay stamp duty on the ‘bricks and mortar’ of a property, so if you are paying extra for any white goods or furniture, they are exempt.
  • Stamp duty is not payable if you inherit a property.

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