Taxes are usually the most significant amount payable when buying a property in the UK, usually with a mortgage loan. Stamp duty is also payable on stock and share transfers. However, many myths surround these duties, so this site has the latest information.
The government sets stamp duty rates with HM Revenue and Customs (HMRC) collecting the tax on the completion of a property transaction. The formal name is Stamp Duty Land Tax or SDLT. The current percentages range from 0% (up to £250,000) to 12% for values over £1.5 million.
Below are the current rates of Stamp Duty for property purchases in England and Wales. Please note:
|Property Price||SDLT Rate|
|Up to £250,000||0%|
|The portion between £250,001 to £925,000||5%|
|The portion between £925,001 to £1,500,000||10%|
|The portion over £1,500,001||12%|
The Chancellor of the Exchequer announced a radical change in the rates and structure during his 2014 Autumn statement.
Now the tax is only payable on the portion of the value in the bracket, and came into effect from Midnight 3rd December 2014.
For example; for a house sold for £300,000 the stamp duty payable is now £2,500 - (0% of £250,000 (£0) plus 5% of £50,000 (£2,500) equals £2,500).
These rates are fixed and payable upon completion of a property purchase. Your solicitor usually deducts the appropriate amount from your final account for conveyancing services. So what will you pay?
There are several types of charges payable on land-based transactions, although most people are in SDLT payable on residential property sales.
This tax is what most people will pay when they buy another property. The purchaser generally pays this tax via their solicitor, although some sellers will pay this tax for you as part of a sale agreement.
The percentage you pay depends on the sale price of your property and is currently only payable on a sale value above £250,000.
Higher duties come into force from 1st April 2016 for buy-to-let properties and second homes. Click here for more information.
The Chancellor announced a new stamp duty cut so properties up to £250,000 pay zero tax. First-time buyers can now purchase their initial property paying no tax up to £500,000 with 5% SDLT payable on the portion from £425,001 to £625,000
All temporary discounts ceased with rates back to pre-pandemic levels.
The £500,000 stamp duty holiday extends until 30th June 2021. Additionally, you pay no tax for transactions up to £250,000 until 30th September 2021. The nil rate band falls back to £125,000 on 1st October 2021.
A new stamp duty holiday begins, so the nil rate band ends at £500,000 until 31st March 2021 (extended to 31st July 2021).
First-time buyers have stamp duty removed on properties up to a value of £500,000 for the first £300,000. You pay no tax up to £300,000, then 5% for the portion between £300,001 and £500,000. If you're a first-time buyer and the property exceeds £500,000, then the standard rates apply to the total price.
New Buy-To-Let rates introduced.
The Labour leader, Ed Miliband announced today that first-time buyers would pay no Stamp Duty on purchases up to £300,000. This Stamp Duty holiday would take effect under a Labour government and last three years.
Ed stated the £225m funding of this election incentive comes from a 2% increase in Duty for overseas investors and reducing tax avoidance from landlords.
The Scottish Parliament announced a new system to replace Stamp Duty named Land and Buildings Transaction Tax. Check the new rates for Scotland and calculate any tax due.
New reforms of charging were introduced in the Chancellor's Autumn Statement with higher bands for more expensive properties.
Find out how much tax you'll pay using our SDLT calculator.
Find more details about the history of stamp duty rates by the Chancellors over the years.
Be aware that the previous stamp duty rate is payable on the total value of the transaction and not split according to the percentages. So if you had a sale price of £260,000 then your payment rate is 3% of all of the £260,000.
Lower Rates for commercial property used by the business community still apply.
Your solicitor normally pays the tax on the completion of your purchase. However, you'll incur a financial penalty if you don't pay on time and payment must be made within 30 days of legal completion.
Purchasing a house or shares has incurred the tax for many decades now.
The initial rate of 1% was drastically increased many times under the labour government from 1997 through to 2010 to a top rate of 7%.
The Conservative party made substantial reforms in late 2014 to increase the top rate even further to 12%. However, 98% of home sales will see a reduction in their overall tax bill from these changes.
Your solicitor usually calculates the amount due during your home move. The total amount makes up your final invoice, deducted from any proceeds, and automatically transferred over to HMRC on your behalf.
In legal terms, HM Revenue and Customs calculate "the consideration". Usually, the consideration is simply the total purchase price but could include other aspects of a sale.
Find out how much tax you'll pay using our Stamp duty calculator.