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What is Stamp Duty?
Stamp Duty is a tax that must be paid when buying property or land in the UK. It’s known as Stamp Duty Land Tax (SDLT) in England and Northern Ireland, Land and Buildings Transaction Tax (LBTT) in Scotland, and Land Transaction Tax (LTT) in Wales.
Stamp Duty is only due if the price of the property you’re buying reaches a certain threshold. Rather than paying one rate on the entire property cost, Stamp Duty is tiered so that different rates are payable on different portions of the property price (see tables below).
Rates will also vary depending on which home nation you live in, as well as whether you’re a first-time buyer, home mover or purchasing an additional property.
How to pay Stamp Duty
The rules on when and how you need to pay Stamp Duty vary depending on where the property you’re buying is located, as outlined below:
Paying Stamp Duty in England and Northern Ireland
If you’re buying a residential property in England or Northern Ireland, you must send an SDLT return to HMRC (Her Majesty’s Revenue and Customs office) and pay the tax within 14 days from the date of completion (when the contracts are signed and you get the keys to your new home).
Your solicitor or conveyancer will usually calculate and pay your Stamp Duty bill for you and the tax will be added to their fees. If not, you’ll need to request a paper return and fill it out yourself before paying your tax. The paper return includes an 11-character Unique Transaction Reference Number (UTRN) which you will need to use when paying your bill. You can pay HMRC via online or mobile banking, BACS, CHAPS, debit or corporate credit card, by sending a cheque or by paying at your bank.
You must submit a return, even if you don’t owe any Stamp Duty. Be aware that if you don’t pay your bill on time, there’s an automatic £100 fine and interest could be charged too.
Paying Land and Buildings Transaction Tax in Scotland
If you’re buying a property in Scotland, you’ll have 30 days in which to pay your LBTT bill to Revenue Scotland. Again, your conveyancer or solicitor should take care of this for you, but if they don’t, you’ll need to submit an online return. You’ll then be asked to enter your payment method and a unique 13-character tax reference number (starting with the letters ‘RS’) will be displayed on the screen. You must quote this number when making your payment.
You can pay your tax by transferring the money online or by mobile banking using Revenue Scotland’s bank details. You can use Faster Payments, BACS or CHAPS. If you submit your return late, you may be liable to pay a penalty. If you pay your tax bill late, interest will be charged and you may also face a penalty.
Paying Land Transaction Tax in Wales
If you’re buying a property in Wales, you’ll need to send an LTT return to the Welsh Revenue Authority (WRA) and pay the tax within 30 days of the day after completion. If you have a solicitor or conveyancer, you can ask them to file your return online and pay the tax on your behalf. If not, you will need to complete and send a paper return, calculate your tax and pay the bill yourself.
When you pay, you’ll need your 12-digit Unique Transaction Reference Number (UTRN) from your online account as the payment reference. However, with paper submissions, you won’t have a UTRN until your return has been processed so you can use either the postcode of the land\surname of the buyer or the postcode of the land\buyer’s organisation name as a reference. For example, CF379EH\Bloggs
Payments can be made by electronic funds transfer, CHAPS or BACS or by cheque. Penalties and interest may apply if you file or pay late.
Stamp Duty rates
The tables below highlight how much Stamp Duty will be payable when buying a residential property in the UK.
Stamp Duty is calculated on the part of the property price that falls within each band. For example, if you buy a house worth £275,000 in England or Northern Ireland, you’ll pay 0% on the portion up to £250,000 (£0) and 5% on the rest (£25,000) - meaning a total bill of £1,250.
Stamp Duty rates in England and Northern Ireland
| Property price | Stamp Duty rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 0% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Over £1.5 million | 12% |
Land and Buildings Transaction Tax rates in Scotland
| Property price | LBTT rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
Land Transaction Tax rates in Wales
| Property price | LTT rate |
|---|---|
| Up to £180,000 | 0% |
| £180,001 to £250,000 | 4% |
| £250,001 to £400,000 | 5% |
| £400,001 to £750,000 | 8% |
| £750,001 to £1.5 million | 10% |
| Over £1.5 million | 12% |
How much Stamp Duty does a first-time buyer pay?
Stamp Duty relief is available for first-time buyers in England, Northern Ireland and Scotland. A first-time buyer is considered to be someone who has never owned or part-owned a property in the UK or abroad. If you inherited a property, even if you never lived in it and sold it straightaway, you won’t qualify for Stamp Duty relief.
England and Northern Ireland
As of 23 September 2022, first-time buyers in England and Northern Ireland do not have to pay Stamp Duty on properties worth less than £425,000. They pay 5% on the portion between £425,001 and £625,000. There is no relief on properties worth more than £625,000, which means if your first home purchase is above this value, you'll pay Stamp Duty at the standard rates.
Scotland
Tax relief is also available for first-time buyers in Scotland who do not need to pay Land and Buildings Transaction Tax on the first £175,000 of a property. The relief will result in a reduction in tax payable of up to £600 for qualifying first-time buyers.
Wales
There is no first-time buyers’ relief in Wales. However, Land Transaction Tax is only payable on properties worth more than £180,000, which is higher than the standard starting thresholds in England, Northern Ireland and Scotland.
Buy-to-let and second home Stamp Duty
If you’re purchasing a buy-to-let property, second home or holiday home, you’ll need to pay additional Stamp Duty. In England and Northern Ireland, you’ll pay an extra 3% on each tier of tax, and in Scotland and Wales, you’ll pay an extra 4%.
England and Northern Ireland
| Purchase price of property | Stamp Duty rate for additional properties |
|---|---|
| Up to £125,000 | 3% |
| £125,001 to £250,000 | 3% |
| £250,001 to £925,000 | 8% |
| £925,001 to £1.5 million | 13% |
| Over £1.5 million | 15% |
Scotland
| Purchase price of property | LBTT rate for additional properties |
|---|---|
| Up to £145,000 | 4% |
| £145,001 to £250,000 | 6% |
| £250,001 to £325,000 | 9% |
| £325,001 to £750,000 | 14% |
| Over £750,000 | 16% |
Wales
| Purchase price of property | LTT rate for additional properties |
|---|---|
| Up to £180,000 | 4% |
| £180,001 to £250,000 | 8% |
| £250,001 to £400,000 | 9% |
| £400,001 to £750,000 | 12% |
| £750,001 to £1.5 million | 14% |
| Over £1.5 million | 16% |
When must I pay Stamp Duty?
Stamp Duty must be paid within 14 days of the date of completion in England and Northern Ireland and within 30 days of the day after completion in Scotland and Wales.
You need to pay Stamp Duty if you’re buying a property or a piece of land that costs more than:
£250,000 in England and Northern Ireland
£145,000 in Scotland
£180,000 in Wales
Stamp Duty FAQs
Can I reduce Stamp Duty?
The best way to reduce Stamp Duty is to buy a cheaper property. Alternatively, if you’re buying a new build, some property developers will agree to cover your Stamp Duty costs.
It’s also worth noting that Stamp Duty is only payable on the property purchase, not on removable fixtures and fittings, such as curtains and carpets. This means the value of these items could be deducted from the price of the property, reducing the amount of tax you pay.
Who pays Stamp Duty?
Stamp Duty must be paid by anyone purchasing a residential or non-residential property in the UK, including overseas buyers and corporate bodies.
Who does not need to pay Stamp Duty?
You do not have to pay Stamp Duty or file a return if:
No money or other payment changes hands for a land or property transfer
Property is left to you in a will
Property is transferred because of a divorce or dissolution of a civil partnership
You buy a freehold property for less than £40,000
You buy a new or assigned lease of seven years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000
You buy a new or assigned lease of seven years or more, as long as the amount you pay is less than the residential threshold or non-residential threshold of SDLT
You use alternative property financial arrangements – for example, to comply with Sharia law
What is the Stamp Duty threshold?
The Stamp Duty threshold is the point at which Stamp Duty kicks in. In England and Northern Ireland, this tax is payable on properties worth more than £250,000. In Scotland, it’s payable on properties over £145,000 and in Wales, it must be paid on homes over £180,000.
What is a Stamp Duty holiday?
A Stamp Duty holiday is a temporary reduction in the amount of Stamp Duty you need to pay. A Stamp Duty holiday was introduced in July 2020 to help homebuyers and boost the UK property market during the Covid-19 pandemic. It meant that anyone buying a home for less than £500,000 before 1 July 2021 did not have to pay Stamp Duty. Between 1 July 2021 and 30 September 2021, no Stamp Duty was payable on properties worth less than £250,000.
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