Stamp duty explained What is stamp duty?
Stamp duty is payable when you buy a new home. Stamp duty rates vary depending on the value of the property.
What is stamp duty?
Stamp duty is a tax on land and property transactions. For most people, the main time you'll have to pay stamp duty is when you buy a house or apartment. Strictly speaking, you pay stamp duty land tax (SDLT), but it's commonly known as stamp duty instead. We'll be using the shortened phrase 'stamp duty' in this guide.
The amount of stamp duty you'll have to pay depends on the value of the property - see the next page of this guide Current stamp duty rates for more details.
When do I have to pay stamp duty?
When you buy a property costing over £125,000 the stamp duty is usually payable within 30 days of the 'effective date'. This 'effective date' is usually the day of completion.
There are a few circumstances under which the stamp duty is payable earlier. If you pay for the property before completion, or you move in before the day of completion, the 30-day clock starts ticking on this earlier date.
If you use a solicitor when buying the property, they'll usually handle the payment of stamp duty on your behalf. It's your responsibility, though, to make sure the right amount of tax is paid to HMRC.
Do I always have to pay stamp duty?
There aren't many occasions when you won't have to pay stamp duty on properties costing over £125,000.
Even if you swap properties with someone else, with no cash changing hands, you'll still each have to pay stamp duty on the market value of the property you're buying. It also doesn't matter if you're buying the property outright or with a mortgage - the usual stamp duty rules still apply.
One occasion when you don't have to pay stamp duty, though, is divorce or separation. This only applies if one partner is transferring their share of the house or flat to the other - if you sell the property to a third party, the buyer will have to pay stamp duty in the usual way.
Need mortgage advice?
We believe you should seek independent mortgage advice before taking out a mortgage. The Which? Group offers an independent mortgage advice service, Which? Mortgage Advisers, that looks at every mortgage from every available lender. You can also find an independent mortgage adviser using Unbiased.co.uk.
- Current stamp duty rates - how much you'll have to pay in stamp duty if you move in this tax year
- How to buy a house - expert advice on finding and buying your new home
- Which? Money Helpline - give our experts a ring, if you have any stamp duty questions