Stamp duty or as it is properly known, Stamp Duty Land tax, is a tax that gets paid to the government by the buyer of a property when they are purchasing a property or a piece of land. Over the last few years property prices have been increasing at a rapid pace meaning that an additional 1.5 million homes across the UK now attract stamp duty which for home movers kicks in at £125,000. First time buyers have also been hit, however, in that 1.9 million properties have now increased in value to the point that they are worth more than the £300,000 at which Stamp duty kicks in for first time buyers. So how is Stamp duty calculated throughout England and what can you expect to pay?
In England, stamp duty kicks in at a purchase price of £125,000 for home movers and £300,000 for first time buyers according to the following scale
- Up to £125,000 – 0%
- £125,001 to £250,000 – 2% of the property value
- £250,001 to £925,000 – 5% of the property value for that portion
- £925,001 to £1.5 million – 10% of that portion of the property value
- Over £1.5million – 12%
If you are a first time buyer there is some relief:
- Up to £300,000 – 0%
- £300,001 to £500,000 – 5% of the property value
- If the property is over £500,000 then first time buyers get no relief and pay according to the scale above.
If someone is buying a second property and this property is not a replacement for your main residence, i.e. you will own 2 properties, the rates above attract a further 3% tax
- Up to £1250,000 – 3%
- £125,001 to £250,000 – 5% of the property value
- £250,001 to £925,000 – 8% of the property value for that portion
- £925,001 to £1.5 million – 13% of that portion
- Over £1.5million – 15%
As an example: A purchase of a property with a value of £275,000 for an existing homeowner moving to a new home would attract the following SDLT:
- Up to £125,000 – 0%
- £125,001 to £250,000 at 2% of £124,999 = £2,499.98
- £250,001 to £275,000 at 5% of £24,999 = £1,249.95
Total Stamp duty to be paid would be £3,749.93
