Paying Stamp Duty is part of the conveyancing process, and will be dealt with by your solicitor. But it's worth being aware of what it is, how you pay it and how much you'll need to pay. It's determined by the price of your property, but can be impacted by whether you're a first time buyer, already own a home and where in the UK you're buying.
Please note: This information was updated on 13.09.23 and is in line with the latest announcement from the government regarding Stamp Duty.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a government tax that is charged when you buy a property in England or Northern Ireland.
It is usually transferred by your conveyancer when you exchange on your property, and must be paid within 14 days of purchasing your home. Only those buying a property pay Stamp Duty.
The cost is dependent on the price of the property. It's organised into bands. There are different rates if you are buying a second home or a buy-to-let property and in many cases, First Time Buyers are exempt from paying it.
There’s further information on all these different groups below.
How much Stamp Duty do you pay?
The rate of Stamp Duty you pay depends on the type of property, and whether it is residential or non-residential /mixed-use.
There are several rate bands and the tax is calculated on the part of your property that fall within each band. You can find out the exact amount of Stamp Duty you'll have to pay using our Stamp Duty Calculator.
Residential property Stamp Duty rates
Stamp Duty is payable on the rate of tax on the part of the property price within each tax band. As of 23rd September 2022 the rates in England and Northern Ireland for freehold sales and transfers, and most leasehold properties, are:
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Purchase price bands (£)
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SDLT
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Up to £250,000 (this includes shared ownership properties if the share is under £250,000)
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0%
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£250,001 and £925,000
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5%
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£925,001 and £1.5 million
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10%
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Over £1.5 million
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12%
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First Time Buyer Stamp Duty
First Time Buyers don't pay Stamp Duty on properties worth up to £425,000. They pay 5% on the portion between £425,001 and £625,000.
This means First Time Buyers who buy a property worth up to £625,000 will pay no Stamp Duty on the first £425,000 and only pay 5% on the remaining amount.
If the property costs more than £625,000, normal rates will apply.
You will not need to do anything to qualify for the First Time Buyer exemption – your conveyancing solicitor will ensure you meet the appropriate criteria.
You will qualify for the Stamp Duty exemption if:
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You are a First Time Buyer
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You are buying a home to live in
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Your property is below £425,000 (for no Stamp Duty at all)
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Your property is under £625,000 (you will only pay Stamp Duty on the amount over £425,000)
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Your property is not in Scotland or Wales (Scotland has a slightly different scheme, please see below)
Make sure you know the definition of a First Time Buyer in this case:
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You cannot have ever owned a property, even if you have now sold it (this includes inheritance)
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You cannot have owned property abroad
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If it is a joint purchase, both partners must be First Time Buyers
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You can own commercial property
Mixed-use property Stamp Duty rates
Properties accepted as being mixed-use qualify for a lower Stamp Duty rate than residential properties. According to the HMRC, a mixed-use property is one that shares both elements of a residential and non-residential property. For example a flat that is connected to a shop.
For a mixed-use property you pay:
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1% on properties from £150,000 to £250,000
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3% on £250,000 to £500,000
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4% on properties worth over £500,000
Non-residential property includes:
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Agricultural land
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Commercial property – e.g. a shop
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Land or property that is not used as a residence
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Forests
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More than 6 residential properties bought in a single transaction
How do you pay Stamp Duty?
Usually your solicitor or conveyancer will deal with Stamp Duty on your behalf. They tend to submit your return and pay the amount due on the date of completion, and then either add the amount to their fees or collect the amount from you in advance.
Stamp Duty must be paid within 14 days of completion.
Regardless of whether tax is payable on a property, you are obliged to provide a return to HMRC. If the return is not received within 14 days of the completion of the transaction, you could be issued with a fine.
It is impossible to register a change in the ownership of land without the certificate that is provided by HMRC following the acceptance of a return.
Exemptions
There are certain situations in which you may be eligible for SDLT reliefs and exemptions. Stamp Duty reliefs can reduce the amount of tax you pay, however you must complete an SDLT return in order to claim, even if no tax is payable.
You don’t have to pay SDLT or file a return if:
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property is left to you in a will
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property is transferred because of divorce or separation
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property purchased is over the £250,000 price band and the seller agrees to accept a lower offer
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property is given as a gift or transferred with no money or other payment exchanging hands
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property is a holiday lodge - any property that is movable is exempt
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property is a houseboat - only purchases that use land space are taxable (unless your houseboat comes with a large garden, then you may still be charged)
Stamp Duty for Buy-to-Let
Buy-to-Let Stamp Duty rules mean that if you are buying an additional property you will have to pay a Stamp Duty surcharge. This includes Buy-to-Let landlords and those buying second homes and holiday homes.
You will not need to pay the higher rates if you are purchasing a caravan, mobile home or houseboat.
If the total property value is under £40,000, you will not be required to pay any Stamp Duty.
It is important to note that if you purchase a new home before you have sold your first property you will also have to pay the additional SDLT. You can then reclaim this when you sell the property. If you are unable to sell your first home within 18 months of buying your new property, then you will not be entitled to reclaim the SDLT surcharge.
Buy-to-Let Stamp Duty rates (as of 1st October 2021):
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Purchase price bands (£)
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SDLT
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Up to £125,000
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3%
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£125,001 and £250,000
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5%
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£250,001 and £925,000
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8%
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£925,001 and £1.5 million
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13%
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Over £1.5 million
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15%
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Scotland Land and Buildings Transaction Tax
The equivalent of Stamp Duty in Scotland is called ‘Land and Buildings Transaction Tax’. It includes both residential and commercial land and buildings transactions.
Land and Buildings Transaction Tax bands (from 1st April 2021):
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Purchase price bands (£)
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LBTT percentage rate (%)
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Up to £145,000
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0%
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£145,001 to £250,000
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2%
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£250,000 to £325,000
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5%
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£325,001 to £750,000
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10%
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Over £750,000
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12%
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First Time Buyers in Scotland
When the normal bands apply again from 31 March 2021, Scotland will have a different exemption for First Time Buyers. First Time Buyers will be exempt from paying LBTT on properties up to the value of £175,000. If the property value is over that threshold, First Time Buyers will benefit from an exemption for the portion of the property that falls under £175,000. Which means all First Time Buyers who meet the criteria will benefit from a saving of at least £600.
The definition of a First Time Buyer is the same as for the Stamp Duty exemption - you cannot have owned property anywhere else in the world and you must be intending for the property to be your main residence.
Additional properties in Scotland
Those buying additional properties in Scotland must pay a 4% surcharge. This is for second homes and Buy-to-Let properties. This is called an Additional Dwelling Supplement (ADS). Any property under the total value of £40,000 will not have to pay this.
Purchase price bands (£)
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Old LBTT percentage rate (%)
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New LBTT percentage rate (%)
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Up to £145,000
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3%
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4%
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£145,001 to £250,000
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5%
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6%
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£250,001 to £325,000
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8%
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9%
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£325,001 to £750,000
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13%
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14%
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Above £750,000
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15%
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16%
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Land Transaction Tax in Wales
The Stamp Duty equivalent in Wales is the Land Transaction Tax.
The Welsh rates (from 10th October 2022) are:
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Purchase price bands (£)
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Percentage rate (%)
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Up to £225,000
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0%
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£225,001 to £400,000
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6%
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£400,001 to £750,000
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7.5%
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£750,001 to £1,500,000
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10%
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Over £1,500,000
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12%
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Stamp Duty Calculator
You can find out the Stamp Duty Land Tax cost of your house move through our Stamp Duty Calculator.