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Stamp Duty Calculator Plus full Q&A on stamp duty land tax

Stamp Duty Calculator

How much will I have to pay?

£

What is stamp duty?

Stamp duty land tax - to give it its full name - is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. The rate you'll pay the tax at varies based on the price of the property and the type (though we'll focus on residential, rather than commercial, buildings).

Job quote

However, whereas with every other tax, you only pay higher rates on amounts above a threshold, here you pay it on the whole amount.

This means that if you buy a property for £125,001 - £1 over the lowest threshold - then you'll pay the 1% rate on the full amount - a total of £1250.01 - rather than just on the £1 extra (ie pay £125,000 and stamp duty's NOTHING).

Read more in Martins blog: The UK's worst tax: stamp duty.

For details on exceptions, such as ‘Disadvantaged Areas Relief', see the Gov.UK website.

What are the rate boundaries?

As the price you pay for a new property increases, so do the rates of stamp duty. You pay a percentage of the cost, and the rate payable leaps up at a set of thresholds.

What Stamp Duty rate will I pay?
Purchase price
Stamp duty rate
Up to £125,000
0%
£125,000.01 - £250,000
1%
£250,000.01 - £500,000
3%
£500,000.01 - £1,000,000
4%
£1,000,000.01 - £2,000,000
5%
£2,000,000.01 +
7%
Correct at July 2013

The precise boundary for hitting a new tier is the first penny of that tier. So, though it's a tad unlikely, if you were to pay £500,000.01, then you'd face 4% stamp duty (£20,000), but pay one penny less at £500,000 and stamp duty will be 3% (so £15,000) - an illustration of the absurdity of this tax's structure.

To see rates for past years, take a look at the HMRC website.

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How do I pay stamp duty?

The crucial thing to know is that you have 30 days from the date of completion (when all the contracts are signed and dated - read House Buying guide for full timeline) to pay your stamp duty bill. Take longer and you could face a fine and possibly interest on top, so don't!

30 days to pay

In reality, your solicitor will probably sort this out and push you to pay the bill straight away. It's also likely to guide you through the process, but in case it doesn't...

  • Find your Unique Transaction Reference Number (UTRN). It's 11 characters long and found on either your submission receipt if you have filed online, or on your paper SDLT return.

  • Pay by online or phone banking? Just as you might move money to a friend's account, you can call up your bank, use HMRC's bank details, and pay the bill. This normally takes three working days, so take this into account and don't miss the deadline.

  • Other ways to pay. If you don't have online or phone banking set up, you can pay by card over the web (though there's a charge for credit cards), giro in most banks or by cheque in Post Office branches or post - though the last three options require you to present a payslip.

Can I add stamp duty to my mortgage?

The simple answer here is that it is best that you don't, but many people find that they have to.

Doing this could affect your Loan-to-Value ratio (LTV) - the measure of how much of a property's value you are borrowing - for the worse.

To add the cost of stamp duty to your loan is a case of borrowing more when the mortgage is taken out. So, say you needed a £220,000 mortgage to purchase a house costing £300,000, but wanted to add the stamp duty, you'd need to request borrowing of £229,000.

There are two main things to consider here. Firstly, as mortgages tend to be taken out over a long term (25 years or more), that's normally how long the stamp duty borrowing will last too. Over a 25 year term, at a rate of 5%, that extra £9,000 borrowing will cost around £7,000 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 75% - yet in the example above, adding the stamp duty would push you from 73% to 76%, so be careful - speak to a whole-of-market mortgage broker.

Is it the same all across the UK?

For once, yes! The same arrangements and rates apply for homebuyers in England, Wales, Scotland and Northern Ireland.

However, Scotland will shake up their Stamp Duty charges from April 2015. This'll likely mean that people spending £300,000 or less on a home will pay less than under the current system, and those spending more will pay more.

Read the MSE news story for more details on proposed Stamp Duty changes in Scotland.

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