Calculating stamp duty can be off-putting. The recent changes for first-time buyers, buy to let owners and changes to stamp duty thresholds and rates make it harder than ever to understand and calculate what you should be paying.
Different rules apply in different circumstances so here’s a guide to how you can calculate the charges you’ll need to pay:
If you’re purchasing a home (and you’re not a first-time buyer, or buying a second home or buy to let property – see below for guidance on these) then the following applies:
– You’ll pay stamp duty on anything over £125,000 – From £125,000 and £250,000 you’ll pay 2% on the value over £125,000 – From £250,000 to £925,000 you’ll pay 5% – Then from £925,000 to £1.5 million, you’ll pay 10% – Anything over 1.5 million will be calculated at 12%
Buy to let properties/second homes
From April 16 there is now a 3% surcharge on top of the above fees for all buy to let properties and second homes. The threshold has also lowered to £40,000 (so from £40,000 to £125,000 you pay 3%, and then add 3% on to each of the bands above). This means most second homes/buy to lets are now likely to pay stamp duty.
If you sell your main residence within three years so that your second home is your only property and the main residence, you should be able to claim the stamp duty tax back.
First-time buyers now only pay stamp duty on a property over £300,000 so this is likely to make you exempt if you’re buying your first home. After £300,000 you’ll pay 5% on anything up to £500,000 and after that, it’s the same as a standard residential buyer.
The rules are slightly different in Scotland, where you would now have to pay Land and Building Transactions Tax. It’s a similar progressive tax, with the thresholds increasing from £145,000. Scotland also has the surcharge for second homes and buy to let properties.
For a simple way to calculate what stamp duty you’ll need to pay, Stampcalculator.co.uk can calculate the tax for you. Just put in your details and you’ll know what you need to pay.