What can you afford? - Conveyancing - Downsizing - First time buyer

What is stamp duty?

6 min read

Stamp Duty Land Tax can be one of the biggest costs in buying a house - but it’s not always payable for all buyers or properties. We answer the most common questions on stamp duty.

  • Kavi Chauhan Deputy Head of Conveyancing & Licensed Conveyancer
    Kavi Chauhan

    Deputy Head of Conveyancing & Licensed Conveyancer.

    Published June 20th 2024

first time buyers might not have to pay stamp duty land tax when buying a house

Stamp duty, or Stamp Duty Land Tax (SDLT), is a government tax which is paid by the buyer of a property, as a lump sum on completion. It is paid by people who are purchasing a property or land over a certain price bracket. Find out more about Stamp Duty Land Tax and the varying thresholds below.

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Who pays Stamp Duty Land Tax?

If you’re purchasing a property or land over a certain price in England and Northern Ireland you may have to pay stamp duty. It’s the buyer’s responsibility to cover the stamp duty cost, not the seller, and so when purchasing a new home, you will need to factor SDLT into your budget.

You need to pay stamp duty on every house purchase you make, unless it falls under a threshold. Find out more about the costs to pay when buying a house.

What is the stamp duty threshold?

In England and Northern Ireland, no stamp duty is due on the first £250,000 of a residential property (provided it's your main residence and isn't a second home / additional property) and for non-residential land and properties it is £150,000. However, if you are a first time buyer, there is a higher threshold of up to £425,000.

Stamp duty calculator

The stamp duty calculator gives an indication of stamp duty liability for freehold residential property purchases across the UK.

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How much is stamp duty?

The amount you’ll pay in stamp duty depends on its value, location and whether you’re buying a main or a second home.

On the 23rd September 2022, Chancellor Kwasi Kwarteng announced a permanent change to the stamp duty thresholds, and stated that further updates aren’t expected until April 2025. The updates included changes to the thresholds, tax reductions for residential properties in England and Northern Ireland and a threshold increase for first-time buyers, making it £425,000..

The figures and rates in the tables below reflect these latest updates, use these to work out how much stamp duty you'll have to pay for your purchase, or use our stamp duty calculator.

Main residence stamp duty rates

The below table shows stamp duty rates for main residences in England:

Proportion of property valueRate for main residence
Up to £250,0000%
£250,001 to £925,0005%
£925,001 to £1.5 million10%
Over £1.5 million12%

First-time buyer stamp duty

If you’re a first-time buyer you won’t have to pay any tax on properties up to £425,000.

If the cost of the property you’re buying is up to £625,000 you’re also eligible for discounted rates. However, if you’re purchasing a house that costs more than this, you won’t benefit from the first-time buyer exception.

Remember, to be eligible, you, and anyone you’re buying with, must be first-time buyers.  

First-time buyer stamp duty rates

The below table shows stamp duty rates for first-time buyers:

Proportion of property valueRate for first-time buyers
Up to £425,0000%
£425,001 to £625,0005%

For example, if you’re a first-time buyer looking to buy a £525,000 house in England, you’ll start paying SDLT at £425,000. Your total charge would be £5,000.

Stamp duty rates on second homes

If you’re buying an additional property, your main residence might be liable for the surcharge.

The below table shows stamp duty rates for additional properties in England and Northern Ireland:

Proportion of property valueRate for additional properties
Up to £250,0003%
£250,001 to £925,0008%
£925,001 to £1.5 million13%
Over £1.5 million15%

Stamp duty on shared ownership

If you’re buying a house through a shared ownership scheme, you can either pay SDLT in stages or make a one-off payment, known as market value election. With the latter, you’ll pay SDLT based on the full price of your home ­– rather than just the premium you’re paying for the share you’ll own– with nothing to pay if the value goes up in the future. If you choose to pay in stages, you’ll pay a higher rate of SDLT if your property increases in value when you come to buy further shares.

What are Scotland’s Land and Buildings Transaction Tax rates?

In Scotland, stamp duty is known as Land and Buildings Transaction Tax (LBTT). Find below the LBTT rates for standard residential purchases. Like in England, Scotland also has different rates for first time buyers and second properties. If you fall into either of these categories, you can use our stamp duty calculator to get an estimate LBTT cost for your purchase.

Proportion of property valueLBTT main residence rate
Up to £145,0000%
£145,001 to £250,0002%
£250,001 to £325,0005%
£325,001 to £750,00010%
Over £750,00012%

What are Wales’ Land Transaction Tax rates?

In Wales, stamp duty is known as Land Transaction Tax (LTT). Find below the LTT rates for a standard residential purchase in Wales. LTT rates are higher on second properties, to find out the rates for this, use our stamp duty calculator.

Proportion of property valueLTT main residence rate
Up to £225,0000%
£225,001 to £400,0006%
£400,001 to £750,0007.5%
£750,001 to £1,500,00010%
Over £1,500,00012%

Stamp duty rates if you’re not a UK resident

No, non-UK residents have a surcharge to pay. If you are not a UK resident, find out more about the stamp duty payable.

How and when do I pay stamp duty?

Your conveyancer will submit the SDLT return on completion of your purchase and pay the tax due to HMRC on your behalf. You’ll need to pay an administration fee to cover the paperwork, whether tax relief is applied or not.

Your conveyancer has 14 days to file a SDLT return and pay any due, to avoid penalties and interest, therefore it’s likely they will request payment before the purchase has completed. If for any reason the payment is late, or not made, you would start to incur interest. This interest charge starts from the day after you should’ve paid it (14 days after completion), until the day you do pay it. Stamp duty is a tax and therefore any money not paid, is owed to the HMRC.

Who is exempt from paying stamp duty?

As well as first-time buyer exemption, you may be able to get stamp duty relief for multiple dwellings, compulsory purchases and right to buy properties. You can find the full reliefs and exemptions list on the government’s site.

Think you might be entitled to relief? Check the relevant terms and seek specialist tax advice to see if you meet the criteria.

Stamp duty FAQs

Does stamp duty apply to extras?

Stamp duty doesn’t apply to any removable fixtures, such as curtains, furniture or carpets, however it does apply to secure fixture and fittings such as kitchen units, bathroom suits and built in wardrobes.

Therefore, you could potentially reduce your bill by taking off the current market value of any removable fixtures. If you do this, it’s important not to exaggerate the market value as the HMRC may ask you to justify the value.

Additionally, it may increase your bill. For new builds, any optional extras may increase the stamp duty you have to pay. For example, if you spend an extra £5,000 with the developer to get a fitted kitchen, this £5,000 will be added to the purchase price which stamp duty is payable on.

Do I need to pay stamp duty if I sell my house and buy another?

Yes, you will need to pay stamp duty when selling your house and buying another (providing the house price isn't below the threshold). The rate payable will depend if it is your main residence, or an additional property.

What happens if I don’t pay stamp duty?

If you don’t pay stamp duty, you will incur penalties and further charges from the HMRC. Find more information about these stamp duty penalties and charges on Gov.uk.

Can you add stamp duty to your mortgage?

Yes, it may be possible to add the cost for stamp duty onto your mortgage. However, you should only consider this if you are short of funds as it makes the cost of stamp duty more expensive in the long run as you will pay it back with interest. Check with your mortgage adviser or provider to see if it is possible.

Can I claim stamp duty back?

There are certain scenarios where you can apply for a stamp duty refund, the main reason is when you have paid additional property stamp duty rates for a house which becomes your main residence within three years (e.g. if you buy another house before selling your current one).

How does equity transfer stamp duty work?

When transferring equity, if a person(s) is taking on equity or a mortgage for more the £250,000 in total, then stamp duty will need to be paid. Find out more about how the transfer of equity process works.

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