Recent Posts

7am - 7pm | 7 days a week | 0800 862 0870 or 0333 344 7772

Stamp Duty Tax

What Stamp Duty Tax will I have to pay?

Calculate

Results

Stamp duty to pay
Effective rate
Tax Band
%
Taxable Sum
Tax

£0 – £125,000

£0 – £125k

£125,000 – £250,000

£125k – £250k

£250,000 – £300,000

£250k – £300k

£300,000 – £925,000

£300k – £925k

£925,000 – £1,500,000

£925k – £1.5m

£1,500,000+

£1.5mill+

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.

Stamp Duty Tax Rates as of November 2017
Tax Band
First time buyer rate
Standard rate
Buy-to-let/
Second home rate

£0 – £125,000

£0 – £125k

0% 0% 3%

£125,001 – £250,000

£125k – £250k

0% 2% 5%

£250,001 – £300,000

£250k – £300k

0% 5% 8%

£300,001 – £925,000

£300k – £925k

5% 5% 8%

£925,001 – £1,500,000

£925k – £1.5m

10% 10% 13%

£1,500,000+

£1.5mill+

12% 12% 15%

 

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 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.

Mortgage providers

Love Your Postcode is dedicated to negotiating the most attractive mortgage finance terms for clients from its established network of lenders, often securing terms unavailable elsewhere. Feel free to call us on 0121 544 9595 and enquire about having a chat with one of our in branch mortgage advisors.

Stamp Duty
Last Updated: 2016-01-28T09:14:11+00:00
By David Price