Stamp Duty Calculator

What is Stamp Duty tax?

Stamp Duty Land Tax (SDLT) is a progressive tax paid when purchasing a freehold, leasehold or shared ownership residential property in England, Northern Ireland and Wales (separate Land and Buildings Transaction Tax in Scotland).

The rates were overhauled first in 2014 – moving from a “slab” to a “tiered” system. So instead of one rate being applied to the entire purchase value, a number of rates were applied at successive thresholds. This increased the rate on more expensive properties but reduced the rate for the more inexpensive properties.

A significant change came in April 2016 which saw the introduction of a 3% surcharge on additional home purchases. This was design to cool the buy-to-let market by applying a higher stamp duty tax on those buying investment properties, or an additional ‘holiday’ home.

Most recently, the inaugural autumn budget in November 2017 introduced another factor for those buying a property for the first time.

What changes happened to the UK Stamp Duty in November 2017?

HMRC stamp duty was abolished for the first time buyers on properties up to £300,000 (Reportedly benefiting 95% of first-time buyers who pay stamp duty). First-time buyers of homes worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000 but will pay the normal rates of stamp duty on the price above that (Saving £1,660‎ on the average first-time buyer property). If you are a first-time buyer and you are purchasing a property for MORE THAN £500,000, then you will NOT be entitled to the discounted rates.

Below is a table showing what the tax percentages are for first time buyers, the standard rate and for those buying a second property.

How much is stamp duty on a second property?

You’ll usually have to pay 3% on top of the normal SDLT rates if buying a new residential property means you’ll own more than one.

You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase:

• you’ll have to pay higher rates because you own 2 properties
• you may be able to get a refund if you sell your previous main home within 36 months

Can I see some examples of how to calculate my stamp duty?

• If you bought a property (as a second home) for £1,000,000 you would you pay 3% on the first £125,000 (3,750), then 5% of the next £125,000 (6,250), then 8% of the next £675,000 (54,000), and finally 13% of £75,000 (9,750)(Only 13% of £75,000 because you have already calculated £925,000 in the other tax bands).
  
  £3750 + £6250 + £54,000 + £9,750 = £73,750 in stamp duty for a £1m 2nd home (Effectively 7.4% of £1,000,000).
  

• If you bought a property (as a first home) for £60,000, you would pay £0 in tax duty (0% of £60,000).
• If you bought a property (as a second home) for £60,000, you would pay £1,800 (3% of £60,000).

Can I reduce Stamp Duty?

As stamp duty is only payable on the land purchase, removable fixtures and fittings, or chattels, such as freestanding wardrobes, sofas, fridges, carpets and curtains, are not subject to SDLT and can, therefore, be subtracted from the total property price. Everything ‘attached’ to property such as light switches technically form part of the property and are subject to SDLT.

If a seller is willing to leave certain chattels, you should agree to pay a reasonable amount between yourself and the vendor and subtract it from the agreed purchase price. This can be executed by a good tax lawyer or conveyancer.

When is Stamp Duty paid?

You must pay stamp duty to the HMRC 30 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don’t miss the deadline. Some buyers prefer to add on the SDLT amount to their mortgage loan. Ask your mortgage provider for further details.

Reliefs and exemptions

You may be eligible for Stamp Duty Land Tax (SDLT) reliefs if you’re buying your first home and in certain other situations. These reliefs can reduce the amount of tax you pay. You must complete an SDLT return to claim relief, even if no tax is due.

You don’t have to pay SDLT 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 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 7 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 less than 7 years, as long as the amount you pay is less than the residential or non-residential SDLT threshold
• you use alternative property financial arrangements, eg to comply with Sharia law

Read HMRC’s guidance on transactions that don’t need a return.

Services for buyers and tenants

We offer a large range of services for buyers and tenants; free valuations for sellers and landlords; and in-house property consultants who can advise on a range of products such as mortgages, insurances, pensions, low-cost conveyancing.Feel free to call us on 0121 544 9595 and enquire about having a chat with one of our in-branch mortgage advisors. Love Your Postcode know that when it comes to buying a property for the first time, it is important to find an estate agent who has extensive knowledge, understands the property market and can find you the best homes for the best prices.