What is Stamp Duty?
Stamp Duty is a tax you might have to pay if you buy a residential property or piece of land.
You will pay Stamp Duty on residential properties costing more than £250,000 unless you qualify for first-time buyers relief. Stamp Duty will be payable on non-residential properties over £150,000.
If first-time buyer’s relief applies to you, you will pay no Stamp Duty on properties costing up to £425,000 and a discounted rate on property purchases up to £625,000.
This tax applies whether you’re buying with a mortgage or outright.
How much is Stamp Duty?
Stamp Duty for residential properties fall within several rate bands. It is calculated on the part of the property purchase price falling within each band.
| Minimum property purchase price | Maximum property purchase price | Stamp Duty rate |
| £0 | £250,000 | 0% |
| £250,000 | £925,000 | 5% |
| £925,000 | £1,500,000 | 10% |
| Over £1.5 million | – | 12% |
If you’re buying an additional property you will have to pay an extra 3% in Stamp Duty.
| Minimum property purchase price | Maximum property purchase price | Stamp Duty rate (only applies to the part of the property price falling within each band) |
| £0 | £250,000 | 0% |
| £250,001 | £925,000 | 5% |
| £925,001 | £1.5 million | 10% |
| Over £1.5 million | – | 12% |
First-time buyer’s relief
If you’re a first-time buyer you will pay no Stamp Duty on properties up to £425,000.
For properties costing up to £625,000, you will pay no Stamp Duty on the first £425,000. You’ll then pay Stamp Duty at the relevant rate of 5% on the remaining £200,000.
If the property you’re buying is worth over £625,000, you will not be eligible for first-time buyer’s relief.
Non-UK residents
If you or your co-buyer/spouse are a non-UK resident or are not present in the UK for at least 183 days during the 12 months before purchase you might have to pay a further 2% on top of the existing Stamp Duty rates for properties costing more than £40,000.
Refunding higher Stamp Duty rates
If you buy a new property but there’s a delay in selling your previous one, you might have to pay the higher rates of Stamp Duty as you’ll now own two properties.
However if you sell your previous property within three years of buying your new one you might be able to apply for a refund.
When and how to pay Stamp Duty
You have 14 days to file a Stamp Duty Land Tax (SDLT) return and pay any SDLT due.
Your solicitor will deal with the Stamp Duty return and any payment due for you.
For more information on Stamp Duty and how it may affect you please visit: https://www.gov.uk/stamp-duty-land-tax
The information contained in this article is correct at the time of publishing (22/09/2023).
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