Stamp duty

If you’re buying a home or piece of land in the UK, you’ll have to pay stamp duty or the regional tax equivalent. Find out how it works and what you’ll need to consider.

Eve Powell
Eve Powell
Updated 29 June 2022  | 5 mins read

Key points

  • You’ll need to pay tax when you’re buying a property over a particular value, this is called stamp duty in England and Northern Ireland
  • How much tax you pay will depend on where you live, the value of your property and the type of buyer you are
  • First-time buyers can get tax relief if they live in England, Northern Ireland or Scotland
  • You’ll be charged more tax for buying second homes and buy-to-lets

What is stamp duty?

When you’re buying a new home or piece of land, you’ll have to pay tax if it costs over a particular amount. In England and Northern Ireland, this is called Stamp Duty Land Tax (SDLT).

How much tax you’ll pay will depend on:

  • Which part of the UK you’re buying your home in
  • How much your home costs
  • Whether you’re a first-time buyer
  • Whether you’re buying a second or additional home

Scotland and Wales each have an equivalent type of property tax which work slightly differently. In Wales, this is called Land Transaction Tax, whereas in Scotland it’s called Land Buildings Transaction Tax.

How much is stamp duty?

The rate of stamp duty you need to pay is tiered according to the price of your property. This means you’ll pay different percentage rates of tax on different portions of the property price.

You’ll also pay a different amount depending on whether you’re a first-time buyer or buying a second or further property.

If you’re a first-time buyer in England or Northern Ireland the following rates apply:

Price bracket First time buyer stamp duty rate
Up to £300,000 0%
£300,001 to £500,000 5%

If the next property you buy costs under the tax threshold, you won’t need to pay. But once you’re over the threshold, the stamp duty increases with the property price bracket.

The table below shows what you’d need to pay on each portion of the property price if you’re buying your next home in England or Northern Ireland.

Price bracket Moving home stamp duty rate Additional property stamp duty rate
Up to £125,000 0% 3%
£125,001 to £250,000 2% 5%
£250,001 to £925,000 5% 8%
£925,001 to £1.5m 10% 13%
Over £1.5m 12% 15%

Use our stamp duty calculator to find out how much tax you’ll need to pay.

Who pays stamp duty?

Stamp duty applies to both residential and non-residential properties and it’s always the buyer that pays the stamp duty, not the seller.

In England and Northern Ireland, you’ll need to pay stamp duty if:

  • You’re buying your next home that costs more than £125,000
  • You’re a first-time buyer and your home costs more than £300,000
  • You’re buying a second or additional home
  • You’re receiving equity that’s more than the £125,000 threshold
  • You’re remortgaging and release funds that exceed the £125,000 threshold

Who doesn’t pay stamp duty?

In some circumstances, you won’t need to pay stamp duty. For example, if:

  • You’re buying a home that costs less than £125,000
  • You’re a first-time buyer and buying a home for less than £300,000
  • The property is left to you in a will
  • Property or equity is being transferred through the courts because of a divorce or dissolution of a civil partnership

​​Stamp duty in the UK - the differences

The tax you’ll need to pay when you buy a property or piece of land works differently depending on where you live in the UK.

England and Northern Ireland

If you live in England and Northern Ireland, the stamp duty rules are the same. You don’t need to pay stamp duty on the first £125,000 of the property.

And first-time buyers don’t need to pay stamp duty on the first £300,000 of their new home.

If you’re buying a second or additional home, you’ll need to pay an extra 3% on top of each regular stamp duty tier.

Wales

In Wales, the equivalent of stamp duty is called Land Transaction Tax (LTT). There’s no tax relief for first-time buyers, instead, they have to pay the same rate as people moving home.

You’ll still need to pay a higher rate of tax if you’re buying an additional home and already own one or more residential properties.

The following LTT rates apply on each portion of the property price:

Price bracket Moving home stamp duty rate Additional property stamp duty rate
Up to £180,000 0% 4%
£180,001 up to £250,000 3.5% 7.5%
£250,001 up to £400,000 5% 9%
£400,001 up to £750,000 7.5% 11.5%
£750,001 up to £1.5m 10% 14%
Over £1.5m 12% 16%

There are certain cases in Wales when you may be able to get tax relief to reduce the amount of tax you pay - for example, if you’re buying more than one property in the same transaction, like a house with an annexe.

Scotland

In Scotland, the stamp duty is called Land and Buildings Transaction Tax (LBTT). First-time buyers in Scotland don’t need to pay tax on the first £175,000 of the property price.

People buying a second home or a buy-to-let property in Scotland need to pay an ‘additional dwelling supplement’. This is charged at 4% on top of the standard LBTT rates, if the property costs £40,000 or more.

The LBTT rates below apply on each portion of the property price:

Price bracket Moving home stamp duty rate Additional property stamp duty rate
Up to £145,000 0% 4%
£145,001 up to £250,000 2% 6%
£250,001 up to £325,000 5% 9%
£325,001 up to £750,000 10% 14%
Over £750,000 12% 16%

How does stamp duty work?

When you buy a property, you’ll need to pay tax to the government if the property costs over a certain amount.

The stamp duty tax you pay is made up of different percentages that are charged for different portions of the property price.

For example, in England and Northern Ireland, if you bought your next home for £500,000, the tax you’d need to pay would be calculated as follows:

Price bracket % of tax Taxable sum Tax to pay
Up to £125,000 0% £0 £0
£125,000 up to £250,000 2% £125,000 £2,500
£250,000 up to £925,000 5% £250,000 £12,500
Total of stamp duty to pay £15,000

Stamp duty for first-time buyers

Buying a house can be very expensive, but if you’re a first-time buyer in England, Northern Ireland or Scotland, you’ll receive tax relief to help with the costs.

This means you’ll pay less stamp duty than those people who are already on the property ladder.

Stamp duty for second home buyers

For buy-to-let and second homes, you’ll need to pay an extra percentage on each tier of stamp duty.

In England and Northern Ireland, you’ll need to pay an extra 3% and in Scotland and Wales, you’ll pay an additional 4% on each tier.

How do I pay stamp duty?

Usually, your solicitor or conveyancer will calculate and organise the payment for you on your behalf.

They’ll typically collect the money from you beforehand and pay the stamp duty on the day your house sale completes.

When do you need to pay stamp duty?

When you buy a property in England or Northern Ireland, you’ll need to pay stamp duty within 14 days of completing the purchase of your home or land.

In Scotland and Wales, you’ll have 30 days to make the equivalent payment.

However, even if your solicitor or licensed conveyancer is transferring the funds for you, it’s still your responsibility to make sure it’s paid on time. If it isn’t, you’ll be charged a penalty fee and interest until it’s paid.

Can I add stamp duty to my mortgage?

Yes, it’s possible to borrow more money on your mortgage to help cover the stamp duty on your new property.

Although you should make sure you give this careful consideration, as adding stamp duty to your mortgage will affect your loan-to-value ratio (LTV).

This could mean you’re charged higher interest rates and it might impact the type of mortgage you’re able to get, as well as potentially taking you longer to pay the loan back.