Stamp duty explained Stamp duty rates
Stamp duty rates you pay when buying a house or flat vary from 0% to 5%, depending on the value of the property. The rate applies to the whole purchase price and is not tiered. So if you buy your house for £124,000, you'll pay no stamp duty at all, but if you pay £126,000, you'll pay 1% on the whole purchase, a bill of £1,260.
If you're selling your home, you don't have to pay stamp duty on it, but it's worth keeping stamp duty rates in mind when setting your price. If you set the asking price just above a threshold for stamp duty, you could struggle to attract buyers.
For example, someone buying your house for £251,000 will have to pay an extra £7,530 in stamp duty. Drop the price by £2,000 and the stamp duty falls to £2,490.
Current stamp duty rates
The table below shows the current stamp duty rates.
|Current stamp duty rates|
|Value of property||% of total value payable|
|£2,000,001+ (held in 'corporate envelope')||15|
If you're buying a property in a disadvantaged area, you won't have to pay stamp duty if the price is £150,000 or less. That's an extra £25,000 duty-free if you're buying in these areas.
Different stamp duty rate thresholds applied to first-time buyers buying before 25 March 2012. See the next page Stamp duty for first-time buyers for more details.
Breaking a property into smaller units for stamp duty purposes won't work - HMRC will treat them as one transaction.
Stamp duty increased to 7% on £2m homes
A new stamp duty rate of 7% was introduced in the 2012 Budget, in force from 22 March 2012 and payable on homes worth more than £2m. This contrasts with the previous top stamp duty rate of 5% on flats and houses worth £1m or more.
Stamp duty loophole closed
The Chancellor of the Exchequer also announced that stamp duty would now be charged at 15% on properties over £2m that are paid into a 'corporate envelope'. This closes the loophole that previously allowed some individuals to avoid stamp duty altogether by transferring high-value property into company ownership.
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.
This can significantly reduce the amount of stamp duty you have to pay, as it could take you into a lower stamp duty rate band.
Here's an example. Margo is buying a house for £255,000. As the price is over £250,000, she'd usually have to pay stamp duty at 3%, a total bill of £7,500.
If the purchase price includes furniture and carpets worth, say, £6,000, the net price she's paying for the house itself is £249,000. As that's below £250,000, the stamp duty rate is now just 1%, giving her a total bill of £2,490, a huge £5,010 less than if she didn't claim the reduction for the furniture and carpets.
Watch out though - HMRC won't let you get away with putting an unrealistically high price on fixtures and fittings. So Margo can't claim that her carpets are worth £130,000 just to get out of paying stamp duty altogether.
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