How much is stamp duty?

First published on 31 of July 2018 • Updated 22 of January 2019

If you’re buying your next home, or a first home priced over £300,000, you will have to pay stamp duty. This article will tell you more about what stamp duty is, whether you'll need to pay it, and how to calculate it.

Find out:

  • What is stamp duty?
  • Do I need to pay stamp duty?
  • How much stamp duty you'll pay when buying
    • your first home
    • a subsequent home
  • Buy-to-let / second homes and stamp duty
  • What stamp duty is payable on business property.

What is stamp duty?

Usually when we talk about stamp duty, we mean stamp duty land tax (SDLT). This must be paid when buying property in England and Northern Ireland. In Wales there is Land Transition Tax (LTT) instead, while Scotland has Land and Buildings Transition Tax (LBTT), but all three work in broadly similar ways. Generally, the more expensive the property you’re buying, the more stamp duty you will pay.

Do I need to pay stamp duty?

If you’re buying a property or a piece of land in the UK, then in most cases you will have to pay stamp duty (or the corresponding tax in Wales and Scotland). For residential property or land, stamp duty is payable if the price is £125,000 or more. However, there is relief for first-time buyers (see below). If you're unsure about the impact of stamp duty on your purchasing power, talk to your mortgage broker.

Stamp duty when buying your next home

If you already own a home and are selling it to buy your next, then you will pay stamp duty at the normal rate. Stamp duty is charged in ‘slices’, so you pay a certain rate on the part of the property’s value that falls within that slice. You can see how it works in this table:

Portion of home purchase price

Rate of stamp duty

£0 - £125,000

0%

£125,001 - £250,000

2%

£250,001 - £925,000

5%

£925,001 - £1.5 million

10%

So for a property bought for £400,000 you would pay nothing on the first £125,000, then 2 per cent on the next £124,999 (i.e. £2,499.98) and 5 per cent on the next £149,999 (i.e. £7,499.95) for a grand total (rounding up) of £10,000.

First-time buyers and stamp duty

If you’re buying a home for the first time you’ll get stamp duty relief. This means you won’t pay any stamp duty on the first £300,000 provided the property price is £500,000 or less. Above the £300,000 threshold, stamp duty is charged in slices, as shown in this table: 

£300,001 - £925,000

5%

£925,001 - £1.5 million

10%

So if you were to buy a home for £400,000 your stamp duty would be calculated at 5 per cent of £99,999 – so you’d pay just under £5,000. If the property is over £500,000, follow the stamp duty rules for non-first time buyers (see above).

Stamp duty on buy-to-let and second homes

If you’re buying another property to let, or a second home (i.e. not selling your main home) then your stamp duty will be 3 per cent higher at each slice.

Stamp duty on non-residential property

For non-residential property (e.g. shops or office buildings) stamp duty is payable if the price is £150,000 or more. You can find out more about this kind of stamp duty on the HMRC website.

Ask your mortgage broker about the impact of stamp duty on your purchase price.

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About the author
Nick Green
Nick Green
Nick Green is communications manager at Unbiased, the UK's favourite place to find advice you can trust. He has been writing professionally on finance, business and many other topics for over 15 years.