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What is Stamp Duty?

When you buy a property in the UK, you’ll need to pay tax.

In England and Northern Ireland this is called Stamp Duty Land Tax, or just Stamp Duty. In Wales it’s called Land Transaction Tax and in Scotland it’s called Land and Buildings Transaction Tax.

The amount of Stamp Duty you pay will vary depending on a number of factors, including whether or not you’re a first-time buyer.

When do you have to pay Stamp Duty?

Stamp Duty is typically levied on any transaction that involves an exchange of property. This includes transactions such as:

  • buying a freehold property

  • buying a new, or existing leasehold property

  • buying a share of a property through a shared ownership scheme

  • buying any commercial property

  • buying a buy-to-let property

You may be entitled to certain concessions, for instance if you’re a first-time buyer.

You have 14 days after you complete the purchase of your property to file a return to Her Majesty’s Revenue and Customs (HMRC). However, you probably won’t need to take any action yourself, as your conveyancer should collect Stamp Duty money from you in advance and will usually file a return on completion day.

What is the Stamp Duty holiday and how will it work?

In England and Northern Ireland

In 2020 the government announced a Stamp Duty holiday in England and Northern Ireland from 8 July 2020 until 31 March 2021. On 3 March 2021 this was extended to 30 June 2021.

If you’re looking to buy your first property or move home, Stamp Duty will not be charged on the first £500,000 of the purchase price – as long as the home you’re buying will be the only home you own.

This is a temporary measure and, if you’ll own more than 1 property, the 3% extra Stamp Duty will still apply.

This means that, during this time, if you buy your first, or only, property in England or Northern Ireland for £500,000 or less, you won’t have to pay Stamp Duty. If you buy a property for more than £500,000 or an additional property, you will pay significantly less in Stamp Duty.

The tables below show you how much you could save during the Stamp Duty holiday.

 

Buying your first property

Property value
Stamp Duty payable
Potential saving
£250,000
£0
No change
£500,000
£0
£10,000
£1m
£28,750
£15,000
Property value
£250,000
£250,000
Stamp Duty payable
£0
£0
Potential saving
No change
No change
Property value
£500,000
£500,000
Stamp Duty payable
£0
£0
Potential saving
£10,000
£10,000
Property value
£1m
£1m
Stamp Duty payable
£28,750
£28,750
Potential saving
£15,000
£15,000

Buying a new home that will be your only home

Property value
Stamp Duty payable
Potential saving
£250,000
£0
£2,500
£500,000
£0
£15,000
£1m
£28,750
£15,000
Property value
£250,000
£250,000
Stamp Duty payable
£0
£0
Potential saving
£2,500
£2,500
Property value
£500,000
£500,000
Stamp Duty payable
£0
£0
Potential saving
£15,000
£15,000
Property value
£1m
£1m
Stamp Duty payable
£28,750
£28,750
Potential saving
£15,000
£15,000

Purchasing an additional home

Property value
Stamp Duty payable
Potential saving
£250,000
£7,500
£2,500
£500,000
£15,000
£15,000
£1m
£58,750
£15,000
Property value
£250,000
£250,000
Stamp Duty payable
£7,500
£7,500
Potential saving
£2,500
£2,500
Property value
£500,000
£500,000
Stamp Duty payable
£15,000
£15,000
Potential saving
£15,000
£15,000
Property value
£1m
£1m
Stamp Duty payable
£58,750
£58,750
Potential saving
£15,000
£15,000

When the Stamp Duty holiday ends on 30 June 2021, the starting threshold will be set to £250,000.

This will then reduce to £125,000 from 1 October 2021.

If you buy your first property or move home during this period, you won’t pay Stamp Duty on the first £250,000 of a property purchased – as long as the home you’re buying will be the only home you own.

This is a temporary measure and, if you’ll own more than 1 property, the 3% extra Stamp Duty will still apply.

This means that, during this time, if you buy your first, or only, property in England or Northern Ireland for £250,000 or less, you won’t have to pay Stamp Duty. If you buy a property for more than £250,000 or an additional property, you will pay significantly less in Stamp Duty.

The tables below show you how much you could save if your purchase completes between 1 July and 30 September 2021, compared to completing from 1 October 2021.

 

Buying your first property

Property value
Stamp Duty payable
Potential saving
£250,000
£0
No change
£500,000
£10,000
No change
£1m
£41,250
£2,500
Property value
£250,000
£250,000
Stamp Duty payable
£0
£0
Potential saving
No change
No change
Property value
£500,000
£500,000
Stamp Duty payable
£10,000
£10,000
Potential saving
No change
No change
Property value
£1m
£1m
Stamp Duty payable
£41,250
£41,250
Potential saving
£2,500
£2,500

Buying a new home that will be your only home

Property value
Stamp Duty payable
Potential saving
£250,000
£0
No change
£500,000
£12,500
£2,500
£1m
£41,250
£2,500
Property value
£250,000
£250,000
Stamp Duty payable
£0
£0
Potential saving
No change
No change
Property value
£500,000
£500,000
Stamp Duty payable
£12,500
£12,500
Potential saving
£2,500
£2,500
Property value
£1m
£1m
Stamp Duty payable
£41,250
£41,250
Potential saving
£2,500
£2,500

Purchasing an additional home

Property value
Stamp Duty payable
Potential saving
£250,000
£7,500
£2,500
£500,000
£27,500
£2,500
£1m
£71,250
£2,500
Property value
£250,000
£250,000
Stamp Duty payable
£7,500
£7,500
Potential saving
£2,500
£2,500
Property value
£500,000
£500,000
Stamp Duty payable
£27,500
£27,500
Potential saving
£2,500
£2,500
Property value
£1m
£1m
Stamp Duty payable
£71,250
£71,250
Potential saving
£2,500
£2,500

In Scotland

The starting threshold for Land and Buildings Transaction Tax (LBTT) for residential property transactions will temporarily be raised from £145,000 to £250,000.

The revised rates and bands, as set out in the table below, will apply to all relevant transactions where the effective date is between 15 July 2020 and 31 March 2021 (inclusive of these dates).

Purchase price
LBTT
Up to £250,000
0%
£250,001 to £325,000
5%
£325,001 to £750,000
10%
Over £750,000 
12%
Purchase price
Up to £250,000
Up to £250,000
LBTT
0% 0%
Purchase price
£250,001 to £325,000
£250,001 to £325,000
LBTT
5% 5%
Purchase price
£325,001 to £750,000
£325,001 to £750,000
LBTT
10% 10%
Purchase price
Over £750,000 
Over £750,000 
LBTT
12%
12%

This means that, during this time, if you buy your first, or only, property in Scotland for £250,000 or less, you won’t have to pay LBTT.

If you buy a property for more than £250,000, or an additional property, you will pay significantly less in LBTT. If after the purchase you own more than 1 property, the Additional Dwelling Supplement (ADS) remains at 4% of the purchase price.

In Wales

Changes to the Land Transaction Tax (LTT) rates and thresholds will apply to residential property purchases from 27 July 2020 to 30 June 2021. The starting threshold for LTT main residential rates will be set at £250,000.  

This means those buying their only property costing less than £250,000 will pay no LTT and those buying their only property for more than £250,000 will make a saving of £2,450. These changes will not apply to those buying property as an investment, or those owning more than 1 property after the transaction.

How much is Stamp Duty?

The rate of Stamp Duty you’ll pay depends on:

  • which part of the UK you’re buying in

  • whether you’re a first-time buyer

  • whether you’re buying a second or further additional property

  • the value of the property

The figures and percentages below are the Stamp Duty charges for buying a home outside of the Stamp Duty holiday period.

In England and Northern Ireland

The total amount of Stamp Duty you’ll pay is cumulative. You'll have to pay the rate of Stamp Duty for each segment of the property’s value according to these percentages.

Amount
Percentage taxed
£0 - £125,000 0%
£125,001 - £250,000
2%
£250,001 - £925,000
5%
£925,001 - £1,500,000
10%
Over £1,500,001
12%
Amount
£0 - £125,000 £0 - £125,000
Percentage taxed
0%
0%
Amount
£125,001 - £250,000
£125,001 - £250,000
Percentage taxed
2%
2%
Amount
£250,001 - £925,000
£250,001 - £925,000
Percentage taxed
5%
5%
Amount
£925,001 - £1,500,000
£925,001 - £1,500,000
Percentage taxed
10%
10%
Amount
Over £1,500,001
Over £1,500,001
Percentage taxed
12%
12%

So, if you were buying a property worth £1,000,000, you would pay:

  • 0% of the value below £125,000 = £0

  • 2% of the value between £125,001 and £250,000 = £2,500

  • 5% of the value between £250,001 and £925,000 = £33,750

  • 10% of the value between £925,001 and £1,000,000 = £7,500

Making the total Stamp Duty payable = £43,750

 

Buying a second home

If you’re buying a second home in England or Northern Ireland. The rates for additional properties are higher.

Amount
Percentage taxed
£0 - £125,000 3%
£125,001 - £250,000
5%
£250,001 - £925,000
8%
£925,001 - £1,500,000
13%
Over £1,500,001
15%
Amount
£0 - £125,000 £0 - £125,000
Percentage taxed
3%
3%
Amount
£125,001 - £250,000
£125,001 - £250,000
Percentage taxed
5%
5%
Amount
£250,001 - £925,000
£250,001 - £925,000
Percentage taxed
8%
8%
Amount
£925,001 - £1,500,000
£925,001 - £1,500,000
Percentage taxed
13%
13%
Amount
Over £1,500,001
Over £1,500,001
Percentage taxed
15%
15%

Buying your first property

First-time buyers (buyers who have never previously owned a property, or part of a property, anywhere else in the world) get a special discount on their Stamp Duty, meaning there’s no tax on the first £300,000 of the property price provided it is below £500,000. If the property value is above £500,000 then there is no discount and you pay the same as other purchasers.

Amount
Percentage taxed
£0 - £300,000
0%
£300,001 - £500,000
5%
Over £500,001
0%
Amount
£0 - £300,000
£0 - £300,000
Percentage taxed
0%
0%
Amount
£300,001 - £500,000
£300,001 - £500,000
Percentage taxed
5%
5%
Amount
Over £500,001
Over £500,001
Percentage taxed
0%
0%

In Scotland

If you buy a property in Scotland, you’ll pay Land and Buildings Transaction Tax (LBTT). The total amount of LBTT you’ll pay is cumulative.

Amount
Percentage taxed
£0 - £145,000
0%
£145,001 - £250,000
2%
£250,001 - £325,000
5%
£325,001 - £750,000
10%
Over £750,001
12%
Amount
£0 - £145,000
£0 - £145,000
Percentage taxed
0%
0%
Amount
£145,001 - £250,000
£145,001 - £250,000
Percentage taxed
2%
2%
Amount
£250,001 - £325,000
£250,001 - £325,000
Percentage taxed
5%
5%
Amount
£325,001 - £750,000
£325,001 - £750,000
Percentage taxed
10%
10%
Amount
Over £750,001
Over £750,001
Percentage taxed
12%
12%

Buying a second property

For second properties in Scotland you pay an extra 4% on the total value of the property.

 

Buying your first property

First-time buyers in Scotland do not pay any tax on the first £175,000 of the value of their property.

In Wales

When you buy a property in Wales, you’ll pay Land Transaction Tax (LTT). The total amount of LTT you’ll pay is cumulative.

Amount
Percentage taxed
£0 - £180,000
0%
£180,001 - £250,000
3.5%
£250,001 - £400,000
5%
£400,001 - £750,000
7.5%
£750,001 - £1,500,000
10%
Over £1,500,001
12%
Amount
£0 - £180,000
£0 - £180,000
Percentage taxed
0%
0%
Amount
£180,001 - £250,000
£180,001 - £250,000
Percentage taxed
3.5%
3.5%
Amount
£250,001 - £400,000
£250,001 - £400,000
Percentage taxed
5%
5%
Amount
£400,001 - £750,000
£400,001 - £750,000
Percentage taxed
7.5%
7.5%
Amount
£750,001 - £1,500,000
£750,001 - £1,500,000
Percentage taxed
10%
10%
Amount
Over £1,500,001
Over £1,500,001
Percentage taxed
12%
12%

Buying a second property

The rates for additional properties are slightly higher.

Amount
Percentage taxed
£0 - £180,000
3%
£180,001 - £250,000
6.5%
£250,001 - £400,000
8%
£400,001 - £750,000
10.5%
£750,001 - £1,500,000
13%
Over £1,500,001
15%
Amount
£0 - £180,000
£0 - £180,000
Percentage taxed
3%
3%
Amount
£180,001 - £250,000
£180,001 - £250,000
Percentage taxed
6.5%
6.5%
Amount
£250,001 - £400,000
£250,001 - £400,000
Percentage taxed
8%
8%
Amount
£400,001 - £750,000
£400,001 - £750,000
Percentage taxed
10.5%
10.5%
Amount
£750,001 - £1,500,000
£750,001 - £1,500,000
Percentage taxed
13%
13%
Amount
Over £1,500,001
Over £1,500,001
Percentage taxed
15%
15%

Buying your first property

There are no concessions for first-time buyers in Wales.

Are there any exceptions to Stamp Duty?

You may be entitled to a discount depending on your circumstances and the type of property you’re buying. Exceptions include:

  • zero-carbon homes and flats under £500,000 are exempt from Stamp Duty, while those over £500,000 have their Stamp Duty bill reduced by £15,000

  • right-to-buy transactions may qualify for a discount

  • charities can apply for Stamp Duty relief when buying property for charitable purposes

  • registered social landlords may be able to apply for relief