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.
Get an instant conveyancing quote for your purchase, which includes the cost of stamp duty alongside our legal fees, or find out more about Stamp Duty Land Tax and the varying thresholds below.
On this page:
- Who pays Stamp Duty Land Tax?
- How much is stamp duty?
- Stamp duty for first-time buyers
- How and when do I pay?
- Are there any exemptions?
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.
What is stamp duty threshold?
The threshold is when SDLT starts to apply for your purchase. The current threshold in 2023 for residential properties is £250,000 and for non-residential land and properties is £150,000.
That means that if you buy a home for less than the threshold, you won’t pay the tax.
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, reducing the tax for residential properties in England and Northern Ireland. This update also included an increase to the threshold for first-time buyers to £425,000. The figures below reflect these latest updates.
Main residence stamp duty rates
The below table shows stamp duty rates for main residences in England:
|Proportion of property value||Rate for main residence|
|Up to £250,000||0%|
|£250,001 to £925,000||5%|
|£925,001 to £1.5 million||10%|
|Over £1.5 million||12%|
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 value||Rate for first-time buyers|
|Up to £425,000||0%|
|From £425,001 to £625,000||5%|
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 value||Rate for additional properties|
|Up to £250,000||3%|
|£250,001 to £925,000||8%|
|£925,001 to £1.5 million||13%|
|Over £1.5 million||15%|
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.
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.
Are there any exemptions?
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.
Disclaimer: The article above is only a rough guide on stamp duty land tax, and we would always advise clients to seek tax and financial advice before agreeing to a purchase. Stamp duty is not the same throughout the UK, in Scotland, you have to pay Land and Buildings Transaction Tax, while in Wales, it’s the Land Transaction Tax.