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A guide to stamp duty when purchasing a property

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First4Lawyers. Updated, January 02, 2019

When buying a house there are extra costs in addition to the deposit and mortgage - one of which is Stamp Duty Land Tax (SDLT).

Stamp Duty is a lump sum tax that you have to pay on completion of a residential property purchase. Changes to amounts payable came into effect with the 2017 Autumn Budget, in order to encourage first time buyers.

How much is stamp duty?

As of 22 November 2017, Stamp Duty in England and Northern Ireland is charged as follows: 

First time buyers up to £500,000 purchase price:

  • Up to £300,000 - 0%
  • Over £300,000 up to £500,000 - 5%

The 5% is charged on the portion of the price that is over £300,000 - so if you bought a house worth £350,000 you'd pay 0% on £300,00 and 5% on £50,000.

First time buyers purchasing a property over £500,000 are charged the same as second home and buy-to-let owners.

Second homes, buy-to-let and first time buyers paying over £500,000 for a property:

  • Up to £125k 0%
  • Over £125k to £250k - 2%
  • Over £250k to £925k - 5%
  • Over £925k to £1.5m - 10%
  • Over £1.5m - 12%

So, if you buy a property costing £750,000 you'd pay 0% on the first £125,000; then 2% on the next £125,000; then 5% on the remaining portion of £500,000.

GOV.UK website has a handy stamp duty calculator

Your conveyancer should discuss stamp duty with you and if your circumstances are particularly complex you may wish to consult a specialist tax advisor.

Wales introduced Land Transaction Tax (LTT) in 2018, as follows:

  • Up to an including £180,000 - 0%
  • Over 180,000 to £250,000 - 3.5%
  • Over £250,000 to £400,000 - 5%
  • Over £400,000 to £750,000 - 7.5%
  • Over £750,000 to £1.5 million - 10%
  • Over £1.5 million - 12%

In Scotland Land and Buildings Transaction Tax (LBTT) is payable. As above, it is a banded system:

  • Up to £145,000 purchase price - 0%
  • Over £145,000 to £250,000 - 2%
  • Over £250,000 to £325,000 - 5%
  • Over £325,000 to £750,000 - 10%
  • Over £750,000 - 12%

How and when you pay stamp duty

  • UK and Northern Ireland
    Once you have completed the purchase of your property you have 30 days to complete an SDLT return for HMRC and pay the tax.
  • In Scotland you pay LBTT to Scotland Revenue within 30 days of completion.
  • Welsh residents should pay LTT to the Welsh Revenue Authority within 30 days after the day of completion.

Your conveyancer can deal with this for you to save you the added stress. This should be done on the day of completion and the amount payable should be shown in your conveyancer’s completion statement to you.

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Updated:  January 2019


Note: First4Lawyers offers this information as guidance, not advice. Before taking any action, you should seek professional assistance tailored to your personal circumstances and not rely on First4Lawyers’ information alone.

All details and pricing are correct at time of last update. First4Lawyers and their partners are not tax advisors and we recommend you seek appropriate independent financial advice before making any decisions that relate to tax and property.

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