Stamp duty: Who pays it? When? And how much?
Stamp duty tax on home buyers is a major cost to budget for when buying a new property. Whether you're buying your first home, you're a home mover or buying a second property, we take you through everything you need to know about how much stamp duty costs and when you pay stamp duty.
What is stamp duty?
Stamp duty, or Stamp Duty Land Tax if you want to use the official jargon, is a levy that you pay to HM Revenue & Customs when you are buying a home.
It is paid by the person buying a property and how much stamp duty you’ll pay depends on where the property is, how much you are paying for it and whether or not it is your only property. Any property worth less than £40,000 is exempt from stamp duty.
Who pays stamp duty?
It is always the home buyer who pays stamp duty, not the seller. Usually, your solicitor will pay it on your behalf as part of the purchase process.
In England and Northern Ireland, from 23rd September 2022, no stamp duty will be paid on the first £250,000 of the property’s value. First time buyers pay no stamp duty on the first £425,000 of the property’s value. It’s worth noting that stamp duty is set to change again in April 2025 according to the government’s autumn 2022 budget.
If you are buying an additional property, then you pay 3% at the lowest band (and higher rates above this value), see the tables below for full details. If you are a non UK resident, you will also pay a 2% surcharge on top of normal rates.
How much is stamp duty?
The stamp duty rate you pay depends on what price threshold your property falls into and where the property is – there are different rates in Scotland and Wales compared to England and Northern Ireland. It also depends on whether you have to pay a stamp duty surcharge because you are purchasing a second property, such as a buy-to-let.
How much is stamp duty in England & Northern Ireland?
Stamp duty rates in England and Northern Ireland from September 23rd, 2022:
| Purchase price of property | Stamp duty rate | Stamp duty rate for additional properties |
|---|---|---|
| Up to £250,000 | 0% | 3% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5 million | 10% | 13% |
| Over £1.5 million | 12% | 15% |
How much is stamp duty in Scotland?
From 1st April, 2021 LBTT rates in Scotland:
| Purchase price of property | Stamp duty rate | Stamp duty rate for additional properties |
|---|---|---|
| Up to £145,000 | 0% | 4% |
| £145,001 to £250,000 | 2% | 6% |
| £250,001 to £325,000 | 5% | 9% |
| £325,000 to £750,000 | 10% | 14% |
| Over £750,000 | 12% | 16% |
First-time buyer relief in Scotland is £175,000. Stamp duty in Scotland is known as ‘land and buildings transaction tax’ (LBTT).
How much is stamp duty in Wales?
Stamp duty rates (LTT tax) in Wales:
| Purchase price of property | Stamp duty rate | Stamp duty rate for additional properties |
|---|---|---|
| Up to £180,000 | 0% | 4% |
| £180,001 up to £250,000 | 3.5% | 7.5% |
| £250,001 to £400,000 | 5% | 9% |
| £400,001 to £750,000 | 7.5% | 11.5% |
| £750,001 to £1.5m | 10% | 14% |
| Over £1.5m | 12% | 16% |
In Wales stamp duty is called Land Transaction Tax. There is no first-time buyer relief in Wales.
Do I qualify for first-time buyer stamp duty relief?
How much stamp duty will you pay as a first-time buyer? First-time buyers in England and Northern Ireland do not pay stamp duty up to £425,000 and pay 5% on the portion from £425,001 to £625,000. There is no relief on properties over £625,000 or on buy-to-let properties. You are eligible if you and anyone else you are buying with are first-time buyers. See stamp duty for first time buyers for more information.
In Scotland, the starting threshold for first-time buyers is £175,000. There is no first-time buyer relief in Wales.
Stamp duty surcharge on additional properties
Since April 2016 there has been a stamp duty surcharge for anyone buying additional properties. If, at the end of the purchase process, you will own two or more properties then you have to pay a surcharge on top of your ordinary stamp duty bill (unless you are replacing your main home at the same time).
You can find out more with our guide to the stamp duty surcharge.
How is stamp duty calculated?
Stamp duty is calculated in the same way income tax works.
For example, if the agreed price of a home being purchased by an existing homeowner is £550,000, you pay:
0% on the first £250,000 = £0
5% on the next £300,000 = £15,000
Total stamp duty payable = £15,000
Stamp duty calculator
Use our stamp duty calculator to help you work out how much stamp duty you will need to pay:
Stamp Duty Calculator for England & NI, Scotland and Wales
Results go here
Find a mortgage todayWhat stamp duty rates apply to leasehold homes?
In most cases, you will pay stamp duty on the purchase price of a leasehold home at the standard rates. But, if you are buying a brand-new property which has a new lease, or an older property that has just been divided up and therefore new leases have been issued (known as ‘unassigned leases’), you may need to pay an additional charge.
This 1% extra charge will only apply if the total value of the rent you have to pay over the lifetime of the lease exceeds £125,000. HMRC has a calculator on its website which you can use if you think this charge might apply to your purchase.
Does stamp duty apply to fixtures and fittings?
Stamp duty does NOT apply to removable fixtures or “chattels” like freestanding furniture, carpets or curtains. But, it does apply to fixtures and fittings like bathroom and kitchen fittings, and built in wardrobes, which are attached to the building.
You can reduce your bill by subtracting the value of removable fittings from the total price of the property. For example, if carpets are included in the sale of a flat, the buyer and seller must agree a realistic price which reflects their age and quality, and then subtract it from the total price to calculate the stamp duty.
Buyers have been known to try to reduce their stamp duty bills by massively exaggerating the value of fixtures, but HMRC has cracked down on this. You should expect to be able to justify the value of the fixtures to the taxman.
Are there any other stamp duty exceptions?
There are a number of other stamp duty exceptions including:
- Properties worth less than £40,000 are exempt from stamp duty
- Homes that are registered to companies rather than individuals and cost more than £500,000. These have a stamp duty rate of 15%.
- Charities may be able to get relief from stamp duty when they buy land and property for charitable purposes.
- Right-to-Buy transactions may qualify for discounts
- Registered social landlords may be able to get relief if they are buying land or property.
- Zero-carbon homes (including flats) under £500,000 are exempt. Ones worth over £500,000 have their bill reduced by £15,000.
- A full list of stamp duty exemptions and reliefs are listed on the HMRC website.
Can you add stamp duty to a mortgage?
If you can’t afford your stamp duty bill, then you do have the option to borrow more on your mortgage to cover the tax bill. You simply need to calculate how much stamp duty you will owe and increase your mortgage borrowing to cover it.
Just be aware that you’ll pay interest on that extra borrowing, which over the average 25-year term of a mortgage can add up.
Also, adding your stamp duty to your mortgage could mean you end up with a higher interest rate if it pushes your loan-to-value up significantly.
When do you pay stamp duty?
You have 14 days after you complete on the purchase of a property to file a return to HMRC and pay any stamp duty that is due.
Your solicitor or conveyancer will usually calculate and pay your stamp duty bill on your behalf. They will normally submit your return and pay the stamp duty on completion day, having collected the money from you in advance.
Frequently Asked Questions
What are stamp duty rates in 2023?
Under the current rules, stamp duty only applies to properties over £250,000.
Buy a property costing between £250,001 and £925,000 and you’ll pay 5%. If it costs between £925,000 and £1.5 million, the rate is 10%. At the very top end, the remaining amount over £1.5m is charged at 12%. As a first time buyer, you pay no duty on the first £425,000. You then pay 5% on the amount between £425,001 and £625,000. If you are buying a second home, you pay an additional 3% at the lowest band. Different rates apply in Scotland.
Can I avoid stamp duty?
Potentially, yes. There are a host of reliefs and exemptions listed in this guide which can help you reduce stamp duty or even avoid it altogether. There are other circumstances where you won’t need to pay stamp duty. For example, in the event you’re buying a new-build property, some developers offer to pay the stamp duty for you. And if you are divorcing or separating from your partner, you won’t have to pay stamp duty if you purchase your ex’s share of the jointly-owned home. And if someone gifts you a mortgage-free property in their will, you won’t have to pay stamp duty.
You may also be able to negotiate your way out of paying stamp duty. If you are buying a home with a price just above a higher band, you can try asking the agent and/or seller if they would be prepared to accept a slightly lower price. And stamp duty does not apply to removable fixtures, such as carpets or curtains. If you deduct these from the total price of the property, you could bring down your stamp duty bill.
Who is exempt from paying stamp duty?
There are a host of exemptions. For example, if you are purchasing a property worth less than £40,000, it will be exempt from stamp duty. Caravans, mobile homes and houseboats are also exempt, irrespective of their value. Zero-carbon homes (including flats) are exempt. Read this guide for a full list.
Can I claim back stamp duty?
You may be able to claim a stamp duty refund if you sell your main home within three years of completing on a new home. The refund is the 3% surcharge for owning two or more properties. To claim a refund, you will need to complete a stamp duty land tax return online.
What happens if I don’t pay stamp duty?
You have 14 days from completion to file a stamp duty land tax return and make any payment due. Miss the deadline, and HM Revenue & Customs might charge you penalties and interest. The fines begin from the day after the deadline date. You’ll have to pay an initial £100 penalty, but will then have to pay more if the delay continues. This includes a fine of £300 or 5% of the undeclared tax (whichever is greater) six months from the penalty date, and the same again 12 months from the penalty date.
Other ways we can help
Find a Mortgage
Get Conveyancing Quotes
Get House Survey Quotes
Get Homebuyers' Protection Insurance
