Stamp Duty – everything you need to know

What is Stamp Duty UK?

Stamp Duty is a tax you’re required to pay to the government when you buy a property or land in England or Northern Ireland. Scotland and Wales have similar taxes called Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT).

How much is Stamp Duty?

Stamp Duty (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) all have different rates and thresholds, so there isn’t one UK land tax rate.

How much is Stamp Duty in England and Northern Ireland?

Stamp Duty is calculated using different bands.

The current bands in England and Northern Ireland are shown in the table below.

Property price	Stamp Duty Land Tax (SDLT) rate
Up to £125,000	0%
£125,001 – £250,000	2%
£250,001 – £925,000	5%
£925,001 – £1.5 million	10%
Over £1.5 million	12%

If you buy a property that costs £300,000, you will be required to pay the following Stamp Duty:

• First £125,000  – £0
• Next £125,000 – £2,500
• Remaining £50,000 – £2,500

Total Stamp Duty = £5,000 

 

*This calculation assumes:

• you are not a first-time buyer
• you are buying your primary residence

Stamp Duty Scotland

In Scotland, you are required to pay Land and Buildings Transaction Tax (LBTT) rather than Stamp Duty.

Similar to Stamp Duty, Land and Buildings Transaction Tax is charged in bands.

Property price	Stamp Duty Land Tax (SDLT) rate
Up to £145,000	0%
£145,001 – £250,000	2%
£250,001 – £325,000	5%
£325,001 – £750,000	10%
Over £750,000	12%

Stamp Duty Wales

In Wales, you are required to pay Land Transaction Tax (LTT) rather than Stamp Duty.

Land Transaction Tax (LTT) rates

Property price	Land Transaction Tax (LTT) rate
Up to £180,000	0%
£180,001 – £250,000	3.5%
£250,001 – £400,000	5%
£400,001 – £750,000	7.5%
£750,001 – £1,500,000	10%
Over £1,500,000	12%

First-time buyer Stamp Duty

Currently, first-time buyers in England and Northern Ireland are not required to pay any stamp duty up to the value of £300,000. You will then be charged 5% stamp duty on any portion of the property price between £300,000 and £500,000.

First-time buyers’ relief is only available on properties costing up to £500,000. If the property you are buying costs more than £500,000, you will pay the normal rate of Stamp Duty and will not be eligible for first-time buyers’ relief.

First-time buyers in Scotland

First-time buyers in Scotland are not required to pay any Land and Buildings Transaction Tax (LBTT) on the first £175,000.

First-time buyers in Wales 

There is no first-time buyer relief in Wales. Land Transaction Tax (LTT) is charged at the usual rate.

Stamp Duty on shared ownership

If you’re buying a shared ownership property you will have a choice about how you pay Stamp Duty. You can either choose to pay Stamp Duty for the full market value of the property or in stages. If you choose to pay total market value residential rate you will have nothing more to pay if you buy a greater share of the property in the future. Alternatively, if you choose to pay in stages you can pay Stamp Duty on the portion of the property you are initially buying (if above the Stamp Duty threshold) and then won’t need to pay any more Stamp Duty until you own more than 80% of the property.

Calculating Stamp Duty is a little more complicated on leasehold properties. You may need to pay extra Stamp Duty if the accumulated rent over the lifetime of the lease is more than the Stamp Duty threshold. You can use HMRC’s Stamp Duty calculator to work out how much Stamp Duty would be payable with each option.

Second home Stamp Duty

Stamp Duty on second homes is charged at a higher rate in England.

As of 31^st October 2024, buyers are required to pay an additional 5% Stamp Duty on second homes or additional properties.

Stamp Duty rate for additional properties

Property price	Additional property Stamp Duty rate
Up to £125,000	5%
£125,001 – £250,000	7%
£250,001 – £925,000	10%
£925,001 – £1.5 million	15%
Over £1.5 million	17%

Additional Dwelling Supplement – Scotland

In Scotland, if you already own another property, you may be required to pay an additional 8% Land and Buildings Transaction Tax (LBTT).

Additional Dwelling Supplement – Wales

Wales also has an additional dwelling supplement. An additional 5% Land Transaction Tax (LTT) is payable on additional properties costing more than £40,000. This was increased from 4% in December 2024.

The supplement is due whether you are buying a second residential property for personal use or a buy-to-let investment property.

When do you pay Stamp Duty?

You need to complete a Stamp Duty tax return and pay anything owed within 14 days of sale completion. Your solicitor (or conveyancer) will usually handle this for you but you are responsible for ensuring the tax return is filed and Stamp Duty paid on time.

Stamp Duty refunds

If you purchase a new main home before selling your current one, you will have to pay the additional 5% multiple property Stamp Duty. If you sell your current home within 3 years, you may be able to apply for a refund of the additional Stamp Duty you paid.

Stamp Duty calculator UK

Online Stamp Duty calculators can be very useful in helping you understand how much Stamp Duty (or Land and Buildings Transaction Tax or Land Transaction Tax, depending on where you’re buying) will be payable on your new property.

 

Stamp Duty exemption

There are certain circumstances in which you may be eligible for Stamp Duty exemption or relief. These include:

• First-time buyers, buying property costing up to £500,000
• Employers buying a property for an employee
• Companies transferring ownership of a property to another company
• Companies buying property for charitable purposes
• ‘Right to Buy’ property purchases
• Social Housing providers buying properties
• Property investment funds

You must still complete a Stamp Duty tax return, even if no Stamp Duty is payable.

There are lots of costs to consider when buying a property. Stamp Duty is often one of the biggest costs and can also feel like one of the most confusing. Hopefully this guide has made the topic a little more manageable. If in doubt, you should always consult your solicitor for tailored advice.