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The pace of house price rises may be slowing but more and more homebuyers are having to pay stamp duty land tax, though what exact rate you pay depends on the property's price and where in the UK you're buying.
This guide is fully updated with recent stamp duty changes, with the calculators now showing Welsh stamp duty rates too. It also explains when and how you'll have to pay stamp duty and, crucially, how much it'll actually set you back.
In this guide
Stamp Duty Calculators
The rate of stamp duty you'll pay depends on where in the UK you're buying a property. England and Northern Ireland have the same rates, Scotland uses different rate bandings, and Wales uses different ones again.
Click the relevant tab for where in the UK you're buying.
What is stamp duty?
Stamp duty land tax (or land and buildings transaction tax in Scotland) 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 (we'll focus on residential buildings, rather than commercial).
Stamp duty was reformed in 2014 – the slab system (where you'd pay a single rate on the ENTIRE property price) was swept away, and in its place we now have a more progressive system.
How it works in England & Northern Ireland
Under the current system – which applies to England & Northern Ireland – you'll only pay the rate for the proportion of the property that's at that rate. It's quite complex, so here's an example to better illustrate how it works:
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).
How it works for first-time buyers buying a property worth up to £500,000
However, the system's different if you're a first-time buyer buying a property 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)
Using the example above, for 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 counts as a first-time buyer?
A first-time buyer is someone who's never owned a property, whether bought or inherited, anywhere in the world. So if you inherited your late grandma's holiday home in Spain, even though you sold it straightaway, you won't count as a first-time buyer under these rules.
You also won't count as a first-time buyer if you're buying your first property with the intention to let it out.
How it works in Scotland
It's not actually called stamp duty in Scotland anymore. A reform brought in by the Scottish Government in April 2015 means it's now referred to as 'land and buildings transaction tax'.
However, while the name's changed, the principle hasn't. It's still a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. And it's a remarkably similar system to the one the rest of the UK uses, the main difference is the thresholds it uses are at different rates.
Here's an example of how the new Scottish system works, for an example 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.
So in total this means you'll pay £4,600 (£0 + £2,100 + £2,500).
How it works in Wales
The Welsh Land Transaction Tax works similarly to the old stamp duty system, but the Welsh Government has set the the thresholds for the tax bands at 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).
What rate will I have to pay?
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 – but, you only pay the proportion of the purchase price that's actually above the thresholds at the higher rate.
People buying an additional property (ie, in addition to any they already own) will be penalised in the form of an extra stamp duty charge on any property costing more than £40,000.
Under stamp duty rules that took effect in 2014 you pay different rates for different proportions of the property price. This will mean that the following additional property stamp duty rates will apply on each portion of the purchase price on buy-to-let and second homes.
What stamp duty will I pay?
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. | ||
To see rates for past years, take a look at the HMRC website.
What rate will I have to pay if I am a first-time buyer buying a property worth up to £500,000?
The system's completely different if you're a first-time buyer as long as you're not buying a property worth more than £500,000 (if you are buying a property worth more than £500,000, see the table above). You will not have to pay a penny in stamp duty on the first £300,000 and then just 5% of any proportion above £300,000 but below £500,000.
Here's a table to spell it out:
What stamp duty will I pay?
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?
Like the system in the rest of the UK, the rate payable leaps up at a set of thresholds – but, you only pay the proportion of the purchase price that's actually above the thresholds at the higher rate. However, the bandings are different in Scotland as shown in the table below.
What land & buildings transaction tax rate will I pay?
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. | |||
To see rates for past years, take a look at the HMRC website.
How do I pay stamp duty?
The crucial thing to know is that, 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.
How do I pay stamp duty in England, Wales and Northern Ireland?
In case your solicitor doesn't do this for you, here's what you need to do...
-
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 stamp duty return.
-
Pay online or by phone banking?
Just as you might move money to a pal's account, you can call up your bank, use HMRC's bank details, and pay it. 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.
How do I pay stamp duty in Scotland?
The process is similar to the rest of the UK, and again your solicitor is likely to do this for you. However, unlike the rest of the UK, you're not paying HMRC, you need to pay Revenue Scotland instead. If your solicitor doesn't do this for you, here's how you can do it yourself...
-
Submit an online return registering the transaction
You'll need to go to Revenue Scotland's site. You're also able to submit a paper return, the info is available through the link.
-
Find your Transaction Reference.
It's nine characters long, beginning with 'RS'. You can find it on the receipt for your online return.
-
Pay online or by phone banking
Just as you might move money to a pal's account, you can call up your bank or log on, use Revenue Scotland's bank details, and pay it. You can use faster payments, BACS or CHAPS. Remember if you're using BACS that the transfer could take three working days, so don't miss your payment date.
-
Other ways to pay.
If you don't have online or phone banking set up, you can pay by cheque. You must send the cheque to Registers of Scotland.
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Can I add stamp duty to my mortgage?
The simple answer here is that it's best that you don't, but many people find that they have to.
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 £180,000 mortgage to purchase a house costing £300,000, but wanted to add the stamp duty, you'd need to request borrowing of £185,000 (in England, Wales or Northern Ireland). Then use your 'extra' deposit money to pay the stamp duty.
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 £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.