What is stamp duty?
If the property you are buying is worth more than £250,000, then you will have to pay Stamp Duty Land Tax (SDLT).
What is stamp duty payable on?
Stamp duty is payable on both freehold and leasehold properties costing in excess of £250,000.
First-time buyers do not need to pay SDLT on properties worth up to £425,000. Over that amount, SDLT is due. For example, if your property is worth £525,000, you would pay stamp duty on the remaining £100,000.
SDLT for new-build properties remains the same, but some builders may offer an incentive by contributing toward the cost.
On shared ownership properties, stamp duty can vary; you can choose to pay stamp duty on your ownership percentage or on the full purchase price if you are likely to increase your ownership share in the future.
How is stamp duty calculated?
The amount of SDLT you pay is based on a percentage as follows;
| Purchase Price | Stamp Duty % |
| Upto £250,000 | 0% |
| The next £675,000 (the £250,001 to £925,000 portion) | 5% |
| The next £575,000 (the £925,001 to £1,500,000 portion) | 10% |
| The next amount over £1,500,000 | 12% |
These rates apply to property purchased in England and Northern Ireland. (Note: Wales has its own Land Transaction Tax (LTT) rates.)
If you already own a main residence and are purchasing an investment property (such as buy-to-let, holiday let, or a property for a family member), an additional 5% surcharge will apply from October 31, 2024
Stamp duty exemptions
There are some scenarios in which SDLT does not apply:
- Where one partner transfers equity to the other, for example, during divorce or separation.
- First-time buyers where the property is worth £425,000 or under (partial relief applies for properties between £425,001 and £625,000).
- If the property is gifted.
- If the property is received through inheritance or in a will.
- If the property is freehold and costs less than £40,000.
Is stamp duty different in Scotland?
In Scotland, property purchases are liable for Land and Buildings Transaction Tax (LBTT);
| Purchase Price | LBTT % |
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Above £750,000 | 12% |
First-time buyers in Scotland can now benefit from relief on the first £175,000 of their property purchase, potentially saving up to £600. This means that for homes priced above £175,000, LBTT will apply only to the amount above this threshold.
If you are purchasing a second home in Scotland, there is a 4% Additional Dwelling Supplement (ADS) surcharge on the entire purchase price of the property if the property costs more than £40,000.
