Stamp Duty

Stamp Duty Land Tax is a fee charged by the government when you buy a home in England and Wales for more than £125,000.  The charge payable is broken down into ‘band rates’ determined by the value of the property you purchase.

As of 22nd November 2017, first time buyers will benefit from a relief from Stamp Duty Land Tax. First time buyers purchasing their first home for £300,000 or less will pay no Stamp Duty Land Tax, provided they intend to occupy the property as their only or main residence. Where the purchase price is over £300,000 but does not exceed £500,000 they will pay 5% on the amount above £300,000.

Stamp Duty rates were changed in December 2014 to make them much fairer and overall cheaper for most. Under the new rules, you will only pay the band rate for the value of the property that falls within that band – just like the 10%, 20% and 40% you pay in income tax on different elements of your salary.  With this tax you pay nothing on the first £125,000 of the overall value, then 2% on anything between £125,001 and £250,000, 5% on anything between £250,001 and £500,000 and so on. (See below example and current rates table for England and Wales).

As of 22nd November 2017, first time buyers will benefit from a relief from Stamp Duty Land Tax. First time buyers purchasing their first home for £300,000 or less will pay no Stamp Duty Land Tax, provided they intend to occupy the property as their only or main residence. Where the purchase price is over £300,000 but does not exceed £500,000 they will pay 5% on the amount above £300,000.

Example:

STAMP DUTY INFOGRAPHIC

 

Current rates:

PURCHASE PRICE STAMP DUTY RATE
Up to £125,000 0%
£125,000.01 – £250,000 2%
£250,000.01 – £925,000 5%
£925,000.01 – £1,500,000 10%
£1,500,000.01 + 12%
Correct from 4 December 2014

 

If you are buying a second home or a buy to let property there is an additional 3% charge on each band rate. Don’t forget, you can offset the additional 3% charge against Capital Gains Tax liability when you sell. To learn more, speak to one of our Sales Teams who can put you in touch with an Independent Financial Advisor.

How do you pay your stamp duty?

The most important thing to remember is that in England and Wales, Stamp Duty must be paid within 30 days of legal completion.  Should you miss this deadline you may face fines.  In most cases, your solicitor will probably factor this into your purchase process. However, it’s legally your responsibility to ensure your stamp duty is paid.

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