Stamp duty explained Stamp duty rates
The stamp duty rates you pay when buying a property vary from 0% to 12%, depending on the value of the property, and are tiered.
As of 4 December 2014, stamp duty rates are changing - and the amount you pay will be tiered, like income tax.
In simple terms, you won't pay any stamp duty on the first £125,000. You’ll then pay 2% on the portion up to £250,000, and 5% on the portion up to £925,000. Between that point and £1.5 million, it’s 10% - then 12% on anything over £1.5 million.
The new stamp duty rates are set out in the table below. You can scroll down for an example of how it works.
Go further: The Which? Group offers an independent mortgage advice service, Which? Mortgage Advisers, that looks at thousands of mortgages to find the best deal for your personal circumstances. The advisers are also able to explain how stamp duty works and how it will affect you. Call 0808 252 7987 for a free initial consultation.
Stamp duty rates
The table below shows the new stamp duty rates, which are valid from 4 December 2014.
|Stamp duty rates|
|Purchase price of property||% paid on the part of the property price within each tax band|
Stamp duty calculator
To find out how much stamp duty you'll pay on the property you're buying, use our stamp duty calculator.
Or, to understand more about how the tiering system works, check out our example:
- Property price: £275,000
- Portion 1: £0-£125,000 - 0% tax, so total paid for this chunk of the purchase price = £125,000
- Portion 2: £125,000.01-£250,000 - 2% tax (£2,500) + £125,000 = £127,500
- Portion 3: £250,000.01-£275,000 - 5% tax (£1,250) + £25,000 = £26,250
- Total paid: £278,750 (£3,750 of which is stamp duty)
Go further: The cost of buying a house - we list other expenses that homebuyers will need to budget for
Valuing property just below a stamp duty threshold
Before the introduction of the tiered system, those selling a property were often advised to avoid valuing a property just above a stamp duty threshold, as this would dramatically increase a buyer's stamp duty bill. If a property was valued above a stamp duty threshold, even by just a penny, the buyer would have had to pay a higher rate of tax on the entire purchase price.
However, under the new system, the buyer only has to pay the higher rate of tax on that additional amount, so there are no huge increases to their overall tax bill.
Breaking a property into smaller units for stamp duty purposes won't work - HMRC will treat them as one transaction.
Go further: How to value your house - set a realistic price that will attract buyers
Is stamp duty payable on fixtures and fittings?
No, stamp duty is not payable on things like domestic appliances (washing machines, dishwashers etc), carpets, curtains and furniture. If these items are included in the price you pay for the house, you can usually deduct them before calculating your stamp duty bill.
Watch out though - HMRC won't let you get away with putting an unrealistically high price on fixtures and fittings.
Go further: Moving house: a step-by-step guide - what to expect, and when
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