What is Stamp Duty Land Tax?

Stamp Duty Land Tax is an HM Government tax on purchases of property valued above a certain threshold in England. In Wales, properties are subject to a different law, known as Land Transaction Tax.

For property buyers in England, this threshold differs depending on the type of property. As of March 2019, the Stamp Duty Land Tax threshold is:

  • £125,000 for residential properties
  • £150,000 for non-residential land and properties.

When you buy a property worth more than the threshold, you’ll pay Stamp Duty Land Tax.

When Do I Pay Stamp Duty?

In March 2019, the Government shortened the length of time available to file your Stamp Duty Land Tax returns from 30 days to 14 days. This 14 day period begins from the date of completion of your property purchase.

If you don’t file your Stamp Duty Land Tax returns within the time limit, HMRC will issue an immediate penalty, which will increase as time goes on.

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How Much Is Stamp Duty?

There’s a stepped approach to Stamp Duty, depending on the value of the property. The steps are:

  • 0% from £0 to £125,000
  • 2% from £125,001 to £250,000
  • 5% from £250,001 to £925,000
  • 10% from £925,001 to £1.5m
  • 12% for properties over £1.5m

Using an example can best explain how the Stamp Duty is calculated.

If the property you want to buy is valued at £275,000 the Stamp Duty payable is:

  • Nothing on the first £125,000 = £0
  • 2% on £125,000 = £2,500
  • 5% on £25,000 = £1,250

So the total Stamp Duty Land Tax payable is £3,750 unless you are a first-time buyer.

First Time Buyers

If you’re looking to buy your first property, you’ll get Stamp Duty relief as a first-time buyer.

You won’t pay Stamp Duty on properties up to £300,000. If you live in a high-value area such as London and your property is valued more than £300,000 but less than £500,000, you’ll only pay Stamp Duty on the difference. For example, if your property is valued at £375,000, you’ll only pay Stamp Duty on £75,000.

Any properties valued over £500,000 will not qualify for first-time buyer’s relief.

Stamp Duty and Additional Properties

If you’re buying a second home or a buy to let a property you’ll pay an additional 3% Stamp Duty on this home.

You won’t pay the 3% if you are replacing your main residence and you’ve already sold the other property. If there is a delay in selling your main residence and it’s not sold on the day you complete, you will have to pay the additional 3% but you could claim a refund as long as you sell your previous main residence within three years. 

How We Can Help You

Our Conveyancers and Conveyancing Solicitors want to make your move as stress-free as possible. We’ll help you to know exactly how much Stamp Duty you have to pay and we’ll complete the Stamp Duty Land Tax return form for you.

Moving house is one of the most stressful things you can do, so make sure you have the right Conveyancing Solicitors to help you.

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