Stamp Duty Calculator

How much tax will you have to pay when buying a property in the UK?

Updated reduced rates of Stamp Duty Land Tax (SDLT) for residential properties.

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Stamp Duty Due: Band Rate Amount Total Up to
Please note: This calculator is provided as a guide only on how much stamp duty land tax you will need to pay in England and Northern Ireland. It assumes that the property is freehold and for residential purposes.

Everything You Need to Know about the SDLT Changes

Unless you are a first-time buyer, Stamp Duty Land Tax is usually an essential expense when buying a home. Before you start looking for a new property to buy, it’s important to learn more about how this tax could have an effect on your home purchase, and to make sure that you are financially prepared for paying the fee.

Stamp duty is a property transaction tax that came into effect in 1694. Initially, it was introduced as a way to raise funds for the war against France and has been a big expense of buying a property ever since. Stamp duty works differently in each nation in the United Kingdom. In Wales, it is known as land transaction tax whereas it’s called land and building transaction tax in Scotland. England and Northern Ireland share the same stamp duty rules and regulations.

What are the UK Stamp Duty Changes?

To offer additional support to the housing market during the COVID19 pandemic, the UK government announced changes to stamp duty in June 2020, including a stamp duty holiday that was set to be in place for just under a year. However, further changes have been announced to offer continuous support to the housing market, with stamp duty changes announced in the March Budget 2021. House purchases up to £500,000 will continue to be free from the tax until the end of June 2021, and there will be no stamp duty charges on properties bought up to a value of £250,000 until the end of September 2021.

How Much is Stamp Duty:?

Stamp duty is calculated in different bands, determined by the amount that you pay for the property. Since it could add tens of thousands of pounds to a home sale, it should always be considered when purchasing a house, unless you are a first-time buyer since you normally do not have to pay this tax when purchasing your first property up to the value of £300,000. Experts advise homebuyers to think of stamp duty as an extension of their deposit. First time buyers can also currently benefit from paying no stamp duty on their first home up to the value of £500,000.

Currently, you will pay 0% on the first £500,000 when purchasing a home, and the stamp duty fees will be calculated on any remaining cost. If you are purchasing a home for £600,000, for example, you would pay £5,000 in stamp duty, since it would be calculated by working out 5% of the remaining £500,000. There are four different stamp duty bands currently. These include 0% on properties up to £500,000, 5% from £500,001-£925,000, 10% from £925,000-£1,500,000, and 12% for £1,500,000 and above.

It is also worth bearing in mind that if you purchase a second home while you still own a property, an additional 3% stamp duty levy will apply both now and when the stamp duty holiday has ended.

When is Stamp Duty Paid?

If you are purchasing a property that stamp duty is required on, this should be paid within fourteen days of the transaction. This will usually be from the date of completion, and your solicitor can help ensure that you meet the payment deadline. You may be charged penalties and interest by HMRC if you fail to meet the stamp duty payment deadline. Bear in mind that you will still be required to submit a return to HMRC even if you are exempt from paying stamp duty on your property purchase.

The majority of property buyers will be required to pay stamp duty if the property price is above the threshold. Currently, first-time buyers are exempt from paying stamp duty, along with anybody purchasing a property below £500,000 in England. Stamp duty is a standard part of buying a property and should be factored into your deposit. Some buyers choose to factor it into their mortgage but bear in mind that it can add to your long-term debt and interest levels.

When Did Stamp Duty Change?

The first changes to stamp duty in the UK were made in June 2020 by the Chancellor, who introduced a stamp duty holiday for all buyers of properties up to the value of £500,000 to support the housing market during the COVID19 pandemic. Despite the holiday being set to end in April 2021, announcements were made in the March budget 2021 to extend the holiday until the end of June. After that date, there will be a stamp duty holiday on all properties under £250,000 in England until the end of September. From October, stamp duty is expected to return to normal, with £125,000 the point at which buyers will need to start paying the tax on a new property.

For property purchases that are completed by 30 June, the current stamp duty holiday is set to remain in place. It’s also worth noting that if you purchase a property that costs more than £500,000, you will only pay stamp duty on the remaining cost of the property, which can lead to savings of tens of thousands in some cases.

The stamp duty holiday has prompted a surge in home purchases during the COVID19 pandemic. However, the result of this is a rise in house prices, with average prices up 6.9% year-on-year according to figures recently released by Nationwide. So, it’s worth bearing in mind that while you may be paying less in stamp duty by purchasing a home right now, the savings might be partially offset by the price of the property itself.

Will Stamp Duty Change Again in the Future?

Currently, the plans are for stamp duty to go back to normal after September. The usual rules are that stamp duty applies on any home purchase above £125,000, except for first-time buyers who do not have to pay stamp duty up to the value of £300,000 when purchasing their first property. The likelihood of the stamp duty holiday being extended any further after the end of September is quite low since the holiday has so far cost the taxpayer around £1.6 billion. It was introduced to support the housing market and make things easier for buyers who had been financially impacted by the COVID19 pandemic, which it has definitely achieved, with a surge in property purchases across the country and house prices on the rise.

If you’re currently in the process of buying a home or looking for a home to buy, it’s important to note that the rise in demand has led to an overload in conveyancing demands and bottlenecks have arisen in getting purchases completed. If you are at the start of your house buying journey, it’s important to be aware that you might struggle to have a purchase completed by the end of June 2021. However, you can still save by taking advantage of the stamp duty holiday on homes priced at £250,000 and under until the end of September, which is more realistic. If you’re considering homes worth more than £250,000, you can still save by only paying stamp duty on the additional cost.

What You Could Save Due to the Current Stamp Duty Changes?

You could save a significant amount of money due to the stamp duty holiday if you are planning to buy in London in the near future. For properties that are completed before the end of June 2021, there is no stamp duty to be paid on the first £500,000 regardless of whether you are a first-time buyer or buying your second, third or even fourth home.

For example, we have a stunning flat located on Marshall Street in Soho in a highly sought-after residential block with a stunning communal terrace is priced at £750,000, which would usually set you back £27,500 in stamp duty. Before the end of June, you will only pay £12,500 in stamp duty, saving a massive £15,000. From the beginning of July until the end of September, you’ll pay £25,000 in stamp duty, saving, £2,500.

If you’re hoping to avoid stamp duty altogether, check out the impressive studio apartment in Bloomsbury, currently for sale through GLP. Located in the premier art-deco block near Russell Square, this apartment is priced at £325,000, meaning that you’ll pay no stamp duty on the purchase and save £6,250. From the beginning of July until the end of September, the stamp duty will set you back just £3,750 – a saving of £2,500.

For first time buyers in London, the stamp duty holiday has proven to be an ideal way to save money on the purchase of their first property. A fantastic two-bedroom flat located on Birkenhead Street in Bloomsbury is priced at £485,000, which would normally cost a first-time buyer £9,250 in stamp duty. Until 30th June there is no stamp duty charge to pay, allowing first-time buyers a more affordable experience with purchasing London properties in some of the most sought-after areas.

The stamp duty holiday has been extended until the end of June, allowing both first-time buyers and home movers to enjoy massive savings on this essential tax. From the end of June onwards, the stamp duty holiday will only be applicable up to £250,000, giving you another chance to save.

FAQ

What is Stamp Duty?

SDLT otherwise known as ‘Stamp Duty Land Tax’ is a tax you pay when you buy a property or land in the UK.

How do I pay Stamp Duty?

Payment of Stamp Duty is through your property solicitor. Typically your Solicitor will assist you with Stamp Duty payments.

How is Stamp Duty calculated?

Property prices are grouped into different brackets and taxes accordingly –  very similar to how income tax is calculated.

Up until March 2021, the band brackets below.

Main Home Residence

Band First time buyers/standard residential
Up to £500,000 0%
£500,001 and up to £925,000 5%
£925,001 and up to £1.5 million 10%
Above £1.5 million 12%

Second home

There is a 3% additional rate on top of the % above for all second properties.  .

Band Second home
Up to £500,000 3%
£500,001 and up to £925,000 5%
£925,001 and up to £1.5 million 13%
Above £1.5 million 15%

Correct as of July 2020

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