How much is Stamp Duty on houses?

What is Stamp Duty Land Tax?

Abbreviated to SDLT or stamp duty for short, Stamp Duty Land Tax is a tax paid by property buyers in England and Northern Ireland to Her Majesty's Revenue and Customs (HMRC). Stamp duty is based on the value of property or land, and - depending on the stamp duty thresholds - you will pay it when you: 

• buy a freehold property
• buy a new or existing leasehold
• buy a property through a shared ownership scheme
• are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house

Wales has its own version, known as Land Transaction Tax (LTT). You can find out what the stamp duty rates are for buying a home or land in Wales in our guide to LTT, while the information provided below is for residential properties in England.

What are the current stamp duty thresholds?

The stamp duty thresholds are the point at which SDLT starts to apply to property and land purchases. If the value of the property or land is below the threshold that applies to you and your circumstances, there will be no stamp duty to pay. 

As of 23rd September 2022, when the most recent stamp duty changes were made, the current SDLT thresholds are: 

• £250,000 for residential properties
• £425,000 for first-time buyers buying a residential property worth £625,000 or less
• £150,000 for non-residential land and properties

How much is stamp duty?

As mentioned, stamp duty rates are dependent on the value of the land or property you're buying. 

However, the rates also take into account when you bought the property, how much you paid for it, if you're eligible for any relief or exemptions, and whether or not the property or land is your only property, or in addition to any others you already own. 

If you buy a property and it is the only residential property you own, you'll pay based on the rates for a single property, which are as follows:

A higher rate of stamp duty applies when you buy a residential property (or a part of one) for £40,000 or more and if the following all apply to you: 

• it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
• you have not sold or given away your previous main home
• no one else has a lease on it which has more than 21 years left to run

Currently, the higher stamp duty rates are:

Who pays stamp duty?

A general rule to bear in mind is that anyone currently buying residential property in England that's worth more than £250,000 will have to pay stamp duty. As already mentioned, the rate of stamp duty will depend on factors such as property value and individual circumstances. 

In some cases, stamp duty exemptions do apply - such as the first-time buyer stamp duty relief for first-time property buyers.

What is first-time buyer stamp duty relief?

To help first-time buyers get onto the property ladder, the government introduced the first-time buyer stamp duty relief scheme to help them fund and afford to purchase a home. 

You can claim relief if you, and anyone else you're buying a property with, are first-time buyers, and your rate of stamp duty will be: 

• no SDLT up to £425,000
• 5% SDLT on the portion from £425,001 to £625,000

However, if the property you're purchasing is valued above £625,000 you will not be able to claim this relief. In this instance, the standard rates of stamp duty will apply.

How much stamp duty will I pay?

If you know the value of the property you are buying and when you are to complete your purchase, you'll likely be able to work out your stamp duty costs using the details and information above. Free online tools, such as the Money Advice Service's stamp duty calculator and the government's stamp duty calculator, may be useful too. 

As a guide, to help you understand what stamp duty you may be expected to pay, we've outlined the government's examples for single property purchases, additional property purchases and first-time buyer purchases.

Single property purchase example

If you were to buy a house for £295,000, the SDLT you owe will be calculated as:

• 0% on the first £250,000 = £0
• 5% on the final £45,000 = £2,250
• total SDLT = £2,250

Additional property purchase example

If you own a house which is your main residence, you buy an additional residential property for £300,000 and on completion of the purchase you own more than one property, the SDLT you owe on the new purchase will be calculated as:

• 3% on the first £250,000 = £7,500
• 8% on the final £50,000 = £4,000
• total SDLT = £11,500

First-time buyer property purchase example

If you are a first-time buyer and purchase a property for £500,000, the SDLT you owe for your purchase will be:

• 0% on the first £425,000 = £0
• 5% on the remaining £75,000 = £3,750
• total SDLT = £3,750

Can stamp duty be paid in instalments?

Paying your stamp duty in instalments will likely take you beyond the 14-day deadline, which means you risk incurring penalty charges.

Can you add stamp duty to your mortgage?

It is possible to add your stamp duty costs to your mortgage. However, it's important to understand that this will incur interest for the duration of the mortgage as well as affect your loan-to-value ratio.

Do you pay stamp duty when you sell a house?

No, anyone selling a property will not need to pay stamp duty costs on the value of that home. However, if they are buying another home to move into, they will be subject to stamp duty rates on that property.

Do you have to pay stamp duty on new builds?

Yes, you have to pay stamp duty on new builds, just as you do with any residential property. The date of construction has no bearing on the stamp duty rates or thresholds.