What is Stamp Duty, or Stamp Duty Land Tax (SDLT)
When you buy a home in England and Northern Ireland you will be subject to a government tax called Stamp Duty Land Tax (SDLT). It’s usually calculated as a percentage of the transaction value, and your solicitor or conveyancer will advise you on how much it should be for your case.
Here we provide a quick overview of Stamp Duty and who it applies to.
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
The tax is different if the property or land is in:
Scotland – pay Land and Buildings Transaction Tax
Wales – pay Land Transaction Tax if the sale was completed on or after 1 April 2018
You pay the tax 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
How much is Stamp Duty?
The amount of Stamp Duty you pay depends on the purchase price of the property and whether it is your main home.
Who pays Stamp Duty?
All property purchases are potentially liable for Stamp Duty but there are different rules and rates for different types of buyers, some people have to pay extra tax.
Stamp Duty (SDLT) Calculator
Residential and second property
You can use our Stamp Duty calculator to find out how much tax you’ll need to pay when buying a main residential or secondary (investment) property in England or Northern Ireland.
This SDLT calculator works whether you are a first-time buyer, a second home buyer or you’re simply looking to move from one property to another.
Just select the option that applies to you.
When do I have to pay Stamp Duty?
You must send an SDLT return to HMRC and pay the tax within 14 days of completion.
If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees. They’ll also claim any relief you’re eligible for, such as if you’re a first-time buyer.
CONTACT A MORTGAGE BROKER
If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
How can I pay less Stamp Duty?
Being aware of the stamp duty rate bands can help you to reduce stamp duty. If a property’s price is just into a higher band then negotiating the price down into the lower band will save money.
Additionally, SDLT is only charged on the price paid for the property or land. So if you have agreed a price that includes specified fixtures and fittings then you should be able to deduct these from the purchase price for the purposes of calculating duty.
EXAMPLE
Agreed purchase price of £500,000 which includes £20,000 for curtains, carpets and white goods.
SDLT payable on £480,000 (£500,000 less £20,000)
Any agreement with the vendor (seller) must be notified to the estate agent and conveyancer so it can be included with the legal agreements for both parties.
Stamp Duty for second homes and buy to let
If you already own a property and you are buying another in the UK then there will be additional stamp duty to pay.
This only applies if you are buying property to keep in addition to your main residence. This could be:
For these additional properties there is a 3% surcharge in addition to the standard rates.
If you are buying a second home with the intention of living in it, but plan on selling your main residence at a later date, you may be able to claim back the additional property surcharge. Ask your conveyancer to confirm whether this is possible as claims need to be made within a certain timeframe.
