Mortgage Advisor & Director
Mortgage Advisor & Director
If you’re buying a property, whether that’s for your own residential use, or as an investment, you may need to consider stamp duty among the initial costs. This is not payable in every scenario, and varies based on the property's location.
What is stamp duty land tax?
Stamp duty land tax (SDLT) is a fee payable to the government in England and Northern Ireland when you purchase a home higher than a certain value. Similar taxes are also due in the devolved nations of Scotland and Wales, which are known as Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT), respectively.
There are individual thresholds, regulations and guidance about the liability for and payment of stamp duty, depending on where in the UK your property is based.
How much stamp duty will you pay when buying a residential property?
When you’re buying a home to live in, you’ll be liable for SDLT in England and Northern Ireland if your property is valued at £250,000 or more. However, this might not necessarily apply to you if you’re a first time buyer. First-time buyers are entitled to some discount on stamp duty for their first home, however, this depends on its value.
Keep in mind that stamp duty thresholds in England and Northern Ireland will be changing on 31 March 2025.
The below tables show both the current and new thresholds for England and Northern Ireland:
Current
|
Residential property value |
Stamp Duty Payable (charged at % of property value) |
Payable if first-time buyer |
|
£0-£250,000 |
None |
None |
|
£250,001 - £925,000 |
5% |
5% on any element of property value between £425,000-£625,000 (nothing if lower than £425,000 but 5% on the full value if above £625,001) |
|
£925,001 - £1 million |
10% |
10% |
|
Any amount above £1.5 million |
12% |
12% |
From March 2025
|
Residential property value |
Stamp Duty Payable (charged at % of property value) |
Payable if first-time buyer |
|
£0 - £125,000 |
none |
none |
|
£125,001 - £250,000 |
2% |
none |
|
£250,001 - £925,000 |
5% |
5% on the element of the property value between £300,000 and £500,000 (nothing if below £300,000 but 5% on the full amount if more than £500,000) |
|
£925,001 - £1 million |
10% |
10% |
|
Any amount above £1.5 million |
12% |
12% |
Scotland
In Scotland, when you buy a property over the value of £145,000 you’ll need to pay LBTT . First-time buyers get a slightly higher tax-free threshold of £175,000.
|
Residential property value |
Stamp Duty Payable (charged at % of property value) |
|
£0-£145,000 |
none |
|
£145,001-£250,000 |
2% (If first-time buyer, only payable on element above £175,000) |
|
£250,001-£325,000 |
5% |
|
£325,001-£750,000 |
10% |
|
Over £750,000 |
12% |
Wales
In Wales, buying property valued at £225,000 or more will make you liable for LTT. There is no first-time buyer relief offered in Wales.
|
Residential property value |
Stamp Duty Payable (charged at % of property value) |
|
£0-£225,000 |
0%
|
|
£225,001-£400,000 |
6%
|
|
£400,001-£750,000 |
7.5% |
|
£750,001-£1,500,000 |
10% |
|
Over £1,500,000 |
12% |
Get expert advice about mortgages and stamp duty
Stamp duty for buy-to-let properties and second homes
Any additional residential property purchase over and above your own home in England and Northern Ireland that’s worth over £40,000 will be liable for a stamp duty surcharge. This includes all buy-to-let properties, holiday homes and other second homes.
In England and Northern Ireland, the additional stamp duty payable on such properties is 5% on top of the standard Stamp Duty rates. So, for example, if your second home was valued at £250,000 you’d pay 10% (5% standard and a 5% surcharge).
In Scotland, this surcharge is known as the Additional Dwelling Supplement (ADS) and is charged at 6% of the property price on top of the original LDTT. In Wales, the LTT second home surcharge is 4% on top of the standard LTT.
Stamp duty when transferring a property
Stamp duty is also sometimes payable when you transfer ownership of a property without selling it, but this depends on the circumstances, as below:
HMRC charges Stamp Duty Land Tax on the amount paid for a property or the amount of ‘chargeable consideration’ given.
- Marrying/Civil partnership/Cohabiting - It’s payable if the chargeable consideration given in exchange for the share transfer is more than the current threshold for the property type
- If the transfer is a gift and there’s no chargeable consideration, stamp duty does not usually apply. It may apply if there is some mortgage remaining on the property
- If you transfer as part of a settlement for a divorce, separation or the end of a civil partnership you do not pay stamp duty
- If a property is owned as joint tenants or tenants in common and ownership is divided with one person taking a bigger share which they pay cash for, stamp duty pay be payable, if that share meets the current threshold
- If you get land or property under the terms of a will, you will not pay stamp duty even if you take on an outstanding mortgage
- If you transfer land or property to or from a company stamp duty may be payable on the market value
Who is exempt from paying it?
You won’t need to pay stamp duty if you're purchasing a residential home below the value of the current threshold for your country. As outlined above, this threshold varies depending on whether you’re buying as a first-time buyer or not, and in England and Northern Ireland, they change on 1 April 2025.
You also won’t be liable to pay stamp duty if you inherit a property or are awarded it as part of a divorce settlement.
How to pay your stamp duty bill
Usually your conveyancing solicitor will pay this on your behalf as part of the property purchase. However, it’s your responsibility to check that they have done this, and if not you may need to file to pay this yourself with HMRC.
Speak to a mortgage expert about stamp duty
Stamp duty can be difficult to calculate, especially given that there are so many different rules surrounding when you need to pay it, and different thresholds depending on the property value, type and location.
As specialists in the complete home buying journey, at Teito, we can provide guidance on stamp duty when you speak to us about your mortgage needs.
Customers choose to work with Teito because we provide:
- Expert advice on stamp duty
- A 5-star rated service - see TrustPilot and Google reviews
- A free initial consultation
- No pressure advice and expert mortgage knowledge
Ready to take advantage of a free, no-obligation chat with a broker who specialises in mortgages and stamp duty? Get started here.
FAQs
In England stamp duty must be paid within 14 days of your mortgage completion date. It is your responsibility to ensure that this deadline is met and there may be additional charges for failing to meet this deadline.
In Scotland and Wales, there is a slightly more generous deadline of within 30 days of your mortgage completion date.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.