Stamp Duty Guide

This stamp duty guide explains everything you need to know about how stamp duty tax works and how it is calculated, to ensure you know what to expect when buying your next home or investment.

Stamp Duty rates have seen some recent changes in December 2014 and more recently in April 2016, therefore things might have changed since the last time you bought a property. This guide will get you up to speed with today's Stamp Duty rates, so you’ll know exactly how much you’ll need to set aside. 

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (or Land and Buildings Transaction Tax in Scotland) is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. The rate at which the tax is levied is dependent on the property value or purchase price.

Stamp Duty Rates

The current starting threshold is £125,000 for a property if it is to be your main residence. Below that amount, you won’t have to pay anything. The rates then increase, starting at 2% and going up to 12% for properties purchased for £1,500,001 and over. The table below shows the different property purchase price bands and the Stamp Duty rate. 

Property Value Stamp Duty Rate
Up to £125,000 0%
Over £125,001 to £250,000 2%
Over £250,001 to £925,000 5%
Over £925,001 to £1.5 million 10%
Over £1.5 million 12%

Example

If you buy a property for £150,000 the Stamp Duty Land Tax you pay is:

0% on the first £125,000 = £0

2% on the remaining £25,000 = £500 [£25,000 = The difference between the £125,000 threshold and the purchase price = £125,000 to £150,000.

Total = £500

What happens if you have more than one property?

From the 1st April 2016, the government introduced an additional Stamp Duty tax of 3% above the current SDLT rates. This would apply if, when buying a property it means you’ll own more than one.

SDLT rates for additional properties from 1 April 2016

Purchase Price (£) Rate (%)
Up to £125,000 3%
Over £125,000 and up to £250,000 5%
Over £250,000 and up to £925,000 8%
Over £925,000 and up to £1.5 million 13%
Over £1.5 million 15%

** Zero Stamp Duty is paid on properties purchased below £40,000 **

If you’re replacing your main residence:

You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase:

  • You’ll have to pay the additional rates because you own 2 properties.
  • You may be able to get a refund if you sell your previous main home within 36 months / 3 years.

Example

If you already own a property (or more than one) and you want to buy another property for £150,000, (assuming this property is not your main residence), the Stamp Duty Land Tax you pay is:

3% on the first £125,000 = £3,750

5% on the remaining £25,000 = £1,250 [£25,000 = The difference between the £125,000 threshold and the purchase price = £125,000 to £150,000

Total = £5000

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