What is stamp duty?

Home movers

What is stamp duty?

By Marie Kemplay

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What is stamp duty?

Find out how stamp duty works with our expert video guide.


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Want to find out how much stamp duty you'll pay? Use our stamp duty calculator.

Stamp duty is a tax on land and property transactions. Its full name is 'stamp duty land tax' (SDLT), but most people shorten it to 'stamp duty'.

You'll have to pay stamp duty if you're buying a house or flat costing £125,000 or more and it will be your main home. If you're buying a second home, holiday home or buy-to-let property, you'll have to pay stamp duty on anything costing more than £40,000.

The amount of stamp duty you have to pay depends on the value of the property, and is tiered like income tax - see our page on stamp duty rates for more details.

  • Working out how much deposit you need and how much you should set aside for extra costs, such as stamp duty, can be confusing. Which? Mortgage Advisers can take you through everything you need to do, whatever stage of the mortgage journey you are at. You can call for a free initial consultation on 0808 252 7987.
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Stamp duty on buy-to-let property and second homes

On 1 April 2016, the law changed so that people buying a second home or a buy-to-let property - ie any property that won't be their primary residence - now have to pay an extra 3% on each level of stamp duty.

You can see the rates and use our handy buy-to-let stamp duty calculator in our buy-to-let stamp duty guide.

When do I have to pay stamp duty?

When you buy a property costing more than £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 conveyancer - someone who helps with the legal side of buying a house - when buying the property, they'll usually handle the payment of stamp duty on your behalf. However, it's your responsibility to make sure the right amount of tax is paid to HMRC.

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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 more than £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 moving into. It also doesn't matter if you're buying the property outright or with a mortgage - the same stamp duty rules still apply.

One occasion when you don't have to pay stamp duty 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.

Stamp duty for first-time buyers

First-time buyers have to pay the same stamp duty rates as everybody else. Anyone buying a home to live in, including first-time buyers, won't pay any stamp duty on the first £125,000. If you're buying a house or flat costing less than this, you won't pay stamp duty at all.

But when buying a house costing more than £125,000, you will be charged percentages, which increase as the value of the property does. Visit our stamp duty rates guide for more details or check out our stamp duty calculator to find out how much you'll have to pay.

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.

Stamp duty in Scotland and Wales

When buying a property in Scotland, you'll pay Land and Buildings Transaction Tax (LBTT) instead of stamp duty. It's essentially the same tax with a different name and different rates. Our guide to LBTT shows how much you'll pay.

If you're buying a home in Wales, you'll currently pay the same rates as in England, although this could be set to change. The Welsh government will be establishing a land transaction tax to replace stamp duty from April 2018, with the specific details set to be announced in late 2017.

  • Last updated: September 2016
  • Updated by: Stephen Maunder

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