What is Stamp Duty?

Stamp duty is a tax payment that is required when buying a property. The amount you have to pay (if any) is dependent on if you are a first time buyer, which country in the UK you are buying from, and the cost of the property you are buying. After buying the property you will need to submit a Stamp duty Land Tax return (or ensure your solicitor/conveyancer does this for you), following this you can make the payment. It’s recommended to complete the transaction within 30 days of buying the property in order to avoid the possibility of paying any additional fees.

Current Charges for first time buyers:

If you are a first-time buyer in England or Norther Ireland, you will not have to pay Stamp duty on any properties worth up to £300,000. If a property costs between £300,001 and £500,000, the first-time buyer will be charged 5.00% on any of the amount exceeding £300,001. So for example if a property cost £400,000, the buyer will be charged 5.00% on £100,000 of the payment and therefore pay £5,000 in Stamp duty. Any first time buyers purchasing a property over £500,000 will be charged the normal rates (below). However it’s worth noting not all first time buyers are exempt from Stamp duty, the list below includes first time buyers who will not be eligible for the exception.

First time buyers not eligible for Stamp duty relief:

– They have previously or currently owned a share of a property with anyone else

– They plan on letting out the property

– they have ever owned a property overseas

– The first time buyer is buying with someone who owns or have owned a property (every person on the mortgage will need to be first time buyers).

Current charges for those who have bought before or plan on letting the property:

If you have already owned a property or plan on letting it out, the same rules apply for the amount of time you get before having to make the payment, however the charges are different. Below is a table of the most recent Stamp duty charges for those not buying for the first time:

Property Value Stamp Duty Rate (SDR)
Up to £125,000 0%
Between £125,001 – £250,000 2%
Between £250,001 – £925,000 5%
Between £925,001- £1.5m 10%
£1.5m+ 12%

Example – If I was lucky enough to buy a property worth 1.7 million, I would be charged 0.00% SDR for the first £125,000.00, 2.00% between £125,001 and £250,00.00, 5.00% between £250,001 and £925,000, 10.00% between £925,001 and £1.5m, and 12.00% on the £200,00 that is over 1.5m – A total of £168,750.

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