Stamp duty explained Stamp duty rates

We explain stamp duty rates and how much you'll pay depending on the value of the property you're buying.

You won't have to pay stamp tax on the first £125,000 of a property, but as stamp duty is tiered, you'll pay a percentage on portions of the value over that. 

Current stamp duty rates are set out in the graphic below. You can scroll down to see an example of how the tier system works and to find out how stamp duty will change for buy-to-let investors from April 2016.

If you're concerned about what stamp duty means for you, it's worth speaking to a mortgage adviser.

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.

New stamp duty rates

Because stamp duty is tiered, you will pay a different stamp duty rate on different portions of the property value. When you buy a property you're planning to live in (ie not a buy-to-let property or second/holiday home), 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.

05 Stamp duty-01

Take a look at this example to see how it works:

  • 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)

Find out more: to find out exactly how much stamp duty you'll pay on the property you're buying, use our stamp duty calculator

Buy-to-let stamp duty rates

From April 2016, anyone buying a second home or buy-to-let property - ie any property that won't be your primary residence - will have to pay an extra 3% on each tier of stamp duty. Our buy-to-let stamp duty calculator shows you how extra much you'll have to pay.

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.

Find out more: how to value your house - set a realistic price that will attract buyers

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