Stamp duty is the money you pay to the taxman when you buy property or land in the UK worth over a certain value.
As part of their?September mini-budget, Lizz Truss’ short-lived government made cuts to stamp duty to make purchasing property more affordable.?
However, as part of the next government’s?autumn budget, chancellor Jeremy Hunt announced that these cuts would be reversed from April 2025.?
Here’s everything you need to know about this tax.
What is stamp duty?
Stamp duty is a tax you have to pay when you?purchase property?or land.
Wherever you live in the UK, you will have to pay money to the taxman, but it has different names:
-
England and Northern Ireland: stamp duty land tax (SDLT)
-
Wales: land transaction tax (LTT)
-
Scotland: land and buildings transaction tax (LBTT)
You are liable to pay stamp duty (or land transaction tax) when you:
Stamp duty is the money you pay to the taxman when you buy property or land in the UK worth over a certain value.
As part of their?September mini-budget, Lizz Truss’ short-lived government made cuts to stamp duty to make purchasing property more affordable.?
However, as part of the next government’s?autumn budget, chancellor Jeremy Hunt announced that these cuts would be reversed from April 2025.?
Here’s everything you need to know about this tax.
Stamp duty is a tax you have to pay when you?purchase property?or land.
Wherever you live in the UK, you will have to pay money to the taxman, but it has different names:
-
England and Northern Ireland: stamp duty land tax (SDLT)
-
Wales: land transaction tax (LTT)
-
Scotland: land and buildings transaction tax (LBTT)
You are liable to pay stamp duty (or land transaction tax) when you:
-
Buy a home outright or with a?mortgage
-
Purchase property or land that is worth more than £40,000
-
Buy a freehold or?leasehold?property
-
Buy a property through a?shared ownership?scheme
-
Are given land or property in exchange for payment, such as if you take on a mortgage or buy a share in a house
What changes have been made to stamp duty?
Former chancellor Kwasi Kwarteng announced cuts to stamp duty as part of Liz Truss’ government’s?September mini-budget?in an attempt to spark growth within the housing market.?
The minimum cost of a property on which homebuyers pay stamp duty in England and Northern Ireland has been raised from £125,000 to £250,000. For first-time buyers, this figure has increased from £300,000 to £425,000.
Previously, first-time buyers would only benefit from different stamp duty rates if the cost of the property they were buying was £500,000 or less. This amount has now increased to £625,000. If first-time buyers are purchasing a property greater than £625,000, they will pay the standard stamp duty rates.
This means first-time buyers could save a maximum of £6,250 on the purchase of their home, while everybody else could save up to £2,500.
These changes will make it more affordable for people to move house, and make it easier for many first-time buyers to get on the housing ladder.
However, from 31 March 2025, all of September’s changes to stamp duty will be reversed, with them essentially becoming a stamp duty holiday rather than a permanent change. This means the cost of a property on which you start paying council tax will revert to £125,000 from £250,000, and to £300,000 from £425,000 for first-time buyers.?
How much is stamp duty?
How much you pay in stamp duty depends on:
-
Where in the UK you are buying
-
The?value of the property
-
If you are buying a main home or?additional property
-
Whether you are a?first-time buyer?or not (more on this in the next chapter)
Stamp duty is calculated on the part of the property price that falls within each band.
In England and Northern Ireland the stamp duty rates are:
|
Property value |
Current stamp duty rate |
Stamp duty rate from 31 March 2025 |
|
Up to £125,000 |
0% |
0% |
|
£125,001 to £250,000 |
0% |
2% |
|
£250,001 and £925,000? |
5% |
5% |
|
£925,001 and £1.5 million |
10% |
10% |
|
Above £1.5 million |
12% |
12% |
Here’s an example:
-
You’re buying a £350,000 property in England or Northern Ireland?
-
You aren’t a first-time buyer so aren’t eligible for stamp duty tax relief (
-
This means that you would be charged 0% stamp duty on £250,000 of the property
-
But you would pay stamp duty at a rate of 5% on the remaining £100,000 of the house
-
In total you would pay 5% of £100,000 which is £5,000?
You can use the government’s?stamp duty calculator?to work out how much you will need to pay.
In Scotland the tax rates are:
|
Tax Band |
Normal rate |
|
Less than £145k |
0% |
|
£145k to £250k |
2% |
|
£250k to £325k |
5% |
|
£325k to £750k |
10% |
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