Created by: John Fitzsimons | 19 June 2019

Will I have to pay stamp duty?

There are all sorts of costs to consider when buying a new house, besides the actual cost of the property itself. There are moving costs, legal fees and of course stamp duty.

Stamp duty can be a significant extra expense when moving home, but there are all sorts of factors that influence how much you pay, or even if you need to pay it at all.

How much will I have to pay?

Stamp duty is a tax that you pay when purchasing property or land in the UK.

The actual rate of stamp duty you pay is worked out based on the value of the property you’re buying.

There are different tax bands, and the rate is calculated by looking at how much of the property’s value falls within that specific tax band.

The table below breaks down the different rates of stamp duty when purchasing a property in England or Northern Ireland.

Purchase price                 Stamp duty rate
Up to £125,000                0%
£125,001 - £250,000      2%
£250,001 - £925,000     5%
£925,001 - £1.5m           10%
£1.5m+                             12%

So let’s say you buy a property for £200,000. You won’t pay any stamp duty on the first £125,000 of that price, but you will pay 2% on the £75,000 that falls within the 2% tax band. As a result, your stamp duty bill will come to £1,500.

Purchasing a second property

If you are purchasing a second property, whether that’s a holiday home or a buy-to-let, you will have to pay a higher rate of stamp duty. Essentially the rate for each band goes up by three percentage points for each band, so that’s a rate of 3% on the first £125,000, 5% on the value between £125,001 and £250,000, and so on.

What about first-time buyers?

First-time buyers currently enjoy some stamp duty relief when purchasing a property.

If you’re purchasing your first home, then you won’t have to pay any stamp duty if you buy a property worth up to £300,000.

What about Scotland and Wales?

Scotland and Wales have their own devolved governments, and as a result the authorities there have decided to approach stamp duty in a slightly different way.

In Scotland, the tax is called the ‘land and buildings transaction tax’. It works in much the same way as in England and Northern Ireland, but with different thresholds, with no tax to pay on the first £145,000 of any transaction.

In Wales the tax is called the ‘land transaction tax’, and again the tax you pay is calculated on how much of the price falls within each band.

There is nothing to pay on the first £180,000.

How do I pay stamp duty?

Your solicitor will actually handle the paying of the stamp duty on your behalf. Technically you have up to 14 days after the completion of the sale in which to pay it, but most solicitors will push you to clear the balance well in advance.