Everything you need to know about Stamp Duty

You’ll most likely have to pay Stamp Duty Land Tax when you buy a new home. We’re here to cover how Stamp Duty works, when it applies, how much you’ll have to pay, and how you can pay it. It’s pretty simple stuff, really.

Just to let you know - the following article relates to how stamp duty land tax affects individuals only. It does not apply to those hoping to purchase properties through companies.

What is stamp duty?

Stamp duty land tax (SDLT), commonly known as stamp duty, is a tax you might have to pay when purchasing a property or land in England and Northern Ireland.

If you’re purchasing property in Scotland, you’ll have to pay Land and Building Transaction Tax (LBTT). If you’re purchasing property in Wales, you’ll have to pay Land Transaction Tax (LTT).

Basically, if you’re buying a new home, or plot of land, you might have to pay a tax on it. We know… it’s not ideal, but something you don’t want to get caught out by when budgeting.

The rules that apply for paying stamp duty are when you:

• Buy a freehold property (a property you own outright)
• Buy a new or existing leasehold (a property you lease from a landlord)
• Are transferred land or property in exchange for payment (e.g., you take on a mortgage from someone else)

What are the rates for stamp duty?

Please note that these numbers are valid up to 31st March, 2025, where the thresholds will drop back to their original pre-relief figures.

Rates for first time buyers

Rates for homemovers

You might have to pay additional stamp duty, if you fall within the following categories:

• If you already own a residential property, and you’re buying an additional property, the additional property will be taxed in a higher rate.
• If you’re a non-UK resident, you’ll have to pay an additional 2% on top of existing stamp duty rates.

If you’d like to work out how much stamp duty you’ll have to pay, use our stamp duty calculator.

When does stamp duty apply?

Whether or not you have to pay stamp duty depends on a few different factors. The general exemptions are as follows:

• If you’re buying a property that falls below the stamp duty threshold (the value of which is below), you won’t have to pay any stamp duty. Further details regarding the stamp duty land tax holiday are explained further down below.
• If you’re a first time buyer (along with anyone else you’re buying with), you won’t have to pay any stamp duty on properties under £425,000).

There we have it! If you fall within these two categories, then under the current stamp duty rules, you won’t have to pay a penny. If you fall outside these categories, then unfortunately you’ll have to pay stamp duty.

How much stamp duty do you pay?

The amount of stamp duty you’ll have to pay depends on the purchase price of the property you’re buying. It also depends on other factors, such as whether the homebuyer is a UK resident, if a company is buying the property, or whether the buyer already has an interest in another residential property (i.e., already owns a residential home).

The current stamp duty thresholds determine how much tax you’ll pay by a set of property price bands. The rates within these thresholds vary from 3% - 15% of the purchase price.

How do you pay stamp duty?

Your solicitor or conveyancer will likely file your stamp duty land tax return for you. This fee can either be paid in advance, or they can add the amount to their fees. It entirely depends on how you agree with them to pay it.

If you’d like to pay stamp duty yourself, you can do so by filing a return and paying the tax online. You can pay for stamp duty land tax here.

When do you have to pay stamp duty?

Once you complete the purchase of your new property, you have 14 days to send a stamp duty land tax return to HMRC.

That’s about it really! We’ve covered a few more questions that you might have below. You can also visit our dedicated page to learn more about the mortgage process and make informed decisions.

The value of mortgage advice

If you’d like to talk to a mortgage adviser, no matter what your question might be, we’re always here to help. You can get in touch with us here.

With regards to advice on stamp duty land tax, we recommend that you seek independent tax and legal advice as mortgage advisers are not qualified to offer tax advice.

Furthermore, if your buying situation is anyway complicated, i.e., buying more than one property, or you’re purchasing as a company, or non-resident, qualified tax advice should be sought.