Stamp Duty Calculator are here to keep you up to date with all the latest Stamp Duty news, regulations and info. Here is the most up to date Round up of information available to you…
What is Stamp Duty?
Stamp duty land tax, SDLT (or land and buildings transaction tax in Scotland) is a lump-sum tax you have to pay that if you are buying a property or land costing more than a set amount of money. The rate you’ll pay varies based on the price and type of property.
The following info is assuming you are buying a residential property. Commercial property will be dealt with seperately.
Stamp duty was reformed in 2014, giving way to an incremental system.
Under the current system you only pay the rate for the proportion of the property that’s at that rate.See below:
Let’s assume you’re buying a property for £500,000.
You pay nothing below £125,000, which is £0. You pay 2% on between £125,000 and £250,000, which is £2,500. You pay 5% on the value of the property above £250,000 and £500,000, which is £12,500.
So in total this means you’ll pay £15,000 (£0 + £2,500 + £12,500).
First-time buyers buying a property worth up to £500,000
The system is different if you’re a first-time buyer in England or Northern Ireland worth up to £500,000. You’ll pay zero stamp duty on the first £300,000 of any home costing up to £500,000 (and only 5% on any proportion between £300k and £500k). This means the new stamp duty rates for first-time buyers are:
- Up to £300,000 purchase price: 0% stamp duty
- £300,000.01 to £500,000: 5% (on that portion of the purchase price only)
A first-time buyer purchasing a property worth £500,000, the calculations will be slightly different:
You pay nothing below £300,000, which is £0. You pay 5% on the value of the property above £300,000, which is £10,000.
So in total this means you’ll pay £10,000 (£0 + £10,000).
If you buy a first home costing more than £500,000, you won’t benefit from any change and will be buying under the standard system (see above).
Who is a first-time buyer?
A first-time buyer is someone who’s never owned a property, whether bought or inherited, anywhere in the world.
You also won’t count as a first-time buyer if your first property is a buy-to-let purchase
A reform brought in by the Scottish Government in April 2015 means it’s now referred to as ‘land and buildings transaction tax’. It is no longer known as Stamp Duty
However, while the name’s changed, the principle hasn’t. It’s still a sum of money, a tax that anyone buying a property or land costing more than a certain amount has to pay. It is very similar system to the system in the UK UK, the main difference is the thresholds it uses are at different rates.
Here is how the new Scottish system works, for a property priced at £300,000.
You pay nothing below £145,000, which is £0. You pay 2% on between £145,000 and £250,000, which is £2,100. You pay 5% on the value of the property above £250,000, which is £2,500.
The Welsh Land Transaction Tax works similarly to the old stamp duty system, but link Scotland, the thresholds for the tax bands are different rates.
Here’s an example of how the new Welsh system works, for an example property priced at £300,000.
You pay nothing below £180,000, which is £0. You pay 3.5% on between £180,000 and £250,000, which is £2,450. You pay 5% on the value of the property above £250,000, which is £2,500.
So in total this means you’ll pay £4,950 (£0 + £2,450 + £2,500).
As your property price increases, so does the rate of stamp duty. Stamp Duty rates begin at 2% of the price on properties selling for anything above £125,000, rising to 5% on the next £675,000, 10% of any further £575,000 and 12% on any price above £1.5 million.
PURCHASE PRICE STAMP DUTY RATE ON MAIN RESIDENCE (1) STAMP DUTY RATE FOR ADDITIONAL PROPERTIES (1) Up to £125,000 0% 3% (2) £125,000.01 – £250,000 2% 5% £250,000.01 – £925,000 5% 8% £925,000.01 – £1,500,000 10% 13% £1,500,000.01+ 12% 15% (1) Rate applies to that portion of the purchase price. (2) Properties up to £40,000 are exempt from stamp duty. Properties between £40,000.01 & £125,000 will be charged stamp duty on the full purchase price.
What rate will I have to pay if I am a first-time buyer buying a property worth up to £500,000?
PURCHASE PRICE STAMP DUTY RATE ON FIRST PROPERTY (1) STAMP DUTY RATE FOR ADDITIONAL PROPERTIES (1) Up to £300,000 0% See the table above as you will no longer be a first-time buyer (for additional properties) £300,000.01 – £500,000 5% See the table above as you will no longer be a first-time buyer (for additional properties) (1) Rate applies to that portion of the purchase price.
What rate will I have to pay on property in Scotland?
PURCHASE PRICE RATE ON MAIN RESIDENCE – ON THAT PORTION OF THE PURCHASE PRICE RATE FOR ADDITIONAL PROPERTIES – ON THAT PORTION OF THE PURCHASE PRICE Up to £145,000 0% 3% £145,000.01 – £250,000 2% 5% £250,000.01 – £325,000 5% 8% £325,000.01 – £750,000 10% 13% £750,000.01 + 12% 15% Correct from 1 April 2016.
Wherever in the UK you’re buying, you have 30 days from the date of completion/date of entry (when all the contracts are signed and dated and you get keys – read our Buying a Home guide for full timeline) to pay stamp duty or transaction tax. Take longer and you could face a fine and possibly interest on top, so don’t!
In reality, your solicitor will probably sort this out and push you to pay the bill straightaway – in fact, most tend to want their cash before completing the property purchase for you, just in case you then can’t or don’t pay them.
However, it’s legally your responsibility to ensure your stamp duty/transaction tax is paid. If you are doing this yourself, click the questions to see the process.
Can I add stamp duty to my mortgage?
You can, but it’s not always best.
To add the cost of stamp duty to your mortgage means borrowing more. There are two issues here. Firstly, as mortgages tend to be taken out over a long term (25 years or more), that’s how long the stamp duty borrowing will last too. Over a 25-year term, at a rate of 5%, that extra £5,000 borrowing will cost around £8,500 in interest, so it’s vital to be aware of the cost.
Secondly, this could affect your loan-to-value ratio (LTV) – the measure of how much of a property’s value you are borrowing. The most competitive deals require a maximum LTV of 60% – yet in the example above, adding the stamp duty would push you from 60% to almost 62%, so be careful – speak to a mortgage broker to see if it’s the right decision.