If the property you are buying is worth more than £125,000 then you will have to pay Stamp Duty Land Tax (SDLT).
What is stamp duty?
Stamp duty is payable on both freehold and leasehold properties costing in excess of £125,000.
Stamp duty for first time buyers is the same as any other transaction (there was an exemption in 2010 but this was removed in 2012).
Stamp duty for new build properties is also the same but some builders may offer you an incentive by contribution toward the cost.
Stamp duty on shared ownership properties can vary; you can opt to pay Stamp duty just on your percentage or on the full purchase price if you are likely to purchase a greater percentage in the future.
The amount of Stamp Duty you pay is based on a percentage as follows;
|Purchase Price||Stamp Duty %|
|The next £125,000 (the £125,001 to £250,000 portion)||2%|
|The next £675,000 (the £250,001 to £925,000 portion)||5%|
|The next £575,000 (the £925,001 to £1.5m portion)||10%|
|The remaining portion (above £1.5m)||12%|
These rates apply to property purchased in England, Wales and Northern Ireland.
If you already own a property a main residence and are purchasing an investment property (buy to let, holiday let, property for family member) you will have to pay an additional 3% surcharge.
Stamp duty exemptions
There are some scenarios in which SDLT does not apply;
- Where one partner transfers the equity to the other for example during divorce or separation
- If the property is gifted
- If the property is received through inheritance or in a will
- If the property is freehold costing less than £40,000
Stamp duty (Scotland)
In Scotland, property purchases are liable for Land and Buildings Transaction Tax (LBTT);
|Purchase Price||LBTT %|
|The next £105,000 (the £145,001 to £250,000 portion)||2%|
|The next £75,000 (the £250,001 to £325,000 portion)||5%|
|The next £425,000 (the £325,001 to £750,000 portion)||10%|
|The remaining portion (above £750,000)||12%|
As in England there is an additional surcharge on second homes purchased in Scotland.