What is it and how much will I pay?
There is undeniably a lot to consider when buying a house. With property searches, contract negotiations and completion dates to keep track of, the process of buying a property can often seem daunting. So, when extra outgoings like survey fees, land registry fees and Stamp Duty Land Tax arise, having a clear idea of what you can expect to pay helps to make the process a lot more manageable.
Regularly assisting our clients with the purchase of new properties, our Residential Conveyancing team are often asked about Stamp Duty. The most frequent questions asked are: what is it and how much will I pay?
Below, we have given a brief overview of Stamp Duty Land Tax and included a table that should help you to work out how much you can expect to pay when buying a property.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax, often abbreviated to Stamp Duty, is what must be paid to HMRC when you purchase a property in England, Wales and Northern Ireland.
The current Stamp Duty threshold is £125,000 for residential property and £150,000 for non-residential property. Stamp Duty Land Tax must be paid when you:
- Buy a freehold property
- Buy a new or existing leasehold property
- Buy a property through a shared ownership scheme
- Are transferred ownership for any payment
So, in short, if you are planning on purchasing a property or lease valued at over £125,000 in England, Wales or Northern Ireland, you should expect to pay Stamp Duty Land Tax.
How much will I pay?
The amount of Stamp Duty you pay is dependent on the price of the property that you purchase.
Use the table below to calculate how much you can expect to pay:
|Property or lease premium or transfer value||SDLT rate|
|Up to £125,000||Zero|
|The next £125,000 (the portion from £125,001 to £250,000)||2%|
|The next £675,000 (the portion from £250,001 to £925,000)||5%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion above £1.5 million)||12%|
When purchasing a second home, you will pay the normal rate of stamp duty (shown in the table above) plus an additional 3%.
So, if the second home you are planning on buying costs £255,000, you would pay the standard Stamp Duty Land Tax rate of 5% plus an additional 3%.
When buying a house, you need a Conveyancing Solicitor who you can trust. With 98% of our clients saying they were happy with the quality of our legal advice, you can rest assured that you will be in safe hands with the Conveyancing team at Wildings Solicitors.