Stamp duty explained

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax paid by property buyers in the UK. It applies to both freehold and leasehold properties, whether purchasing outright or with a mortgage.

When is Stamp Duty Payable?

Stamp Duty is payable when you buy a property or land over a certain price in England and Northern Ireland. Different rates and rules apply in Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax).

Current Rates (As of 2024)

For First-Time Buyers

• Up to £425,000: 0%
• £425,001 to £625,000: 5% on the amount above £425,000
• Over £625,000: Normal rates apply

For Residential Properties

• Up to £250,000: 0%
• £250,001 to £925,000: 5%
• £925,001 to £1.5 million: 10%
• Over £1.5 million: 12%

For Additional Properties

• An additional 3% on top of the standard rates for each band.

How is it Calculated?

Stamp Duty is calculated on the portion of the property price that falls within each rate band. For example, if you buy a property for £300,000, you will pay:

• 0% on the first £250,000
• 5% on the remaining £50,000

How to Pay

Your solicitor or conveyancer usually handles the payment of Stamp Duty. They will submit the return and pay the tax on your behalf to HM Revenue and Customs (HMRC) within 14 days of the property purchase.

Stamp Duty is an important consideration when budgeting for a property purchase. Understanding the rates and how they apply to your purchase can help you plan your finances and avoid unexpected costs. Always check the latest rates and consult with a professional for precise calculations.