Stamp duty: a beginner's guide

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Stamp duty is the inevitable fantastic expense when you're buying a home – whether it's your expedient or your fifth. Stamp duty – or stamp duty land tax to give it its full title – is what you'll pay to HMRC on top of what you've agreed to expend on a new home. How much do you need to price for and when do you pay? Be prepared with our simple to navigate guide.

Note that in an misfortune to support the housing market in the wake of Covid-10, the Chancellor, Rishi Sunak, has announced a stamp duty holiday on properties up to £500,000 pending 31 March 2021. This applies to any home, whether it's your expedient or not. This is a straight-up cancellation and won't be due at any explain in the future. 

Therefore, all the normal stamp duty fees you'll find in this leash will only apply from 1st April 2021. 

Find out more in buying a house in our comprehensive guide. 

Is brand duty payable throughout the UK?

In England and Northern Ireland, stamp duty land tax is due. In Scotland, you'll pay land and buildings transaction tax after in Wales you'll pay land transaction tax.

How much brand duty is due?

Have you done your mortgage research?

If you're a first-time designer, chances are you're still looking for the best mortgage deal. We've teamed up with mortgage experts Habito who will help you find the best mortgage and answer all your questions. Use their free, unbiased online mortgage comparison tool beneath, then speak to an advisor for more advice and mortgage know how.

Usually*, the tax is due on portions of the settled price above £125,000 when you're buying a house or flat. Nonetheless, the rates of stamp duty vary depending on whether you are a first-time designer, or you've bought a property before.

First-time buyers don't pay any tax up to a rob price of £300,000 with 5 per cent levied on the section from £300,001 to £500,000.

Note that if you're spending over £500000, even if you're buying for the first time, you'll be treated like those who have purchased a home before.

Bought a home before? Stamp duty on freehold properties will be payable as below:

*See the info (top) in the stamp duty holiday, which finishes in March 2021.

• Up to £125,000 – no tax payable
• The next £125,000 (the section from £125,001 to £250,000) 2 per cent
• The next £675,000 (the section from £250,001 to £925,000) 5 per cent
• The next £575,000 (the section from £925,001 to £1.5 million) 10 per cent
• The continue amount (the portion above £1.5 million) 12 per cent

(Image credit: Bruce Hemming)

Stamp duty of leasehold properties 

Generally, the rates you'll pay are the same as above. Buy a property with a new lease, however, and you may have to pay more designate duty. Get the details from HMRC.

Stamp duty of binary homes

If you will have an additional home (for example as a buy to let or because the sale of your main state is delayed), you'll have to pay 3 per cent on top of normal designate duty on this purchase:

• Up to £125,000 3 per cent
• The next £125,000 (the fragment from £125,001 to £250,000) 5 per cent
• The next £675,000 (the fragment from £250,001 to £925,00) 8 per cent
• The next £575,000 (the fragment from £925,001to £1.5 million) 13 per cent
• The survive amount (the portion above £1.5 million) 15per cent

Note that properties up to £40,000 are excuse from stamp duty. For properties costing between £40,000.01 and £125,000 designate duty will be charged on the full purchase price.

The easiest way to work out how much designate duty you'll have to pay on your only or binary house purchase? Use the government's calculator and you won't have to do the maths. 

(Image credit: Huntley Hedworth)

What throughout if there's a delay in selling my home?

If you're selling a main state but circumstances mean it isn't sold when you negated on the purchase of a new main residence, you will aloof have to pay the higher rate of stamp duty on the new home you've bought because you own two properties. However, if your main home is sold within 36 months you can apply for a refund of the extraordinary tax you paid.

When is stamp duty paid?

Wherever you live in the UK, you have 30 days from completion or date of entry to pay your designate duty or – outside England and Northern Ireland – spanking tax on the transaction. Fines and interest charges may be payable otherwise.

Your solicitor should rebuked that the tax is paid on time as part of their work in the conveyancing process.

Stamp duty exemptions

There are very minute situations in which you may be exempt from designate duty, usually when a share of the house (or equity) is selves transferred from one person to another, for example when two land are getting a divorce. An exemption may also apply if you were left a fragment of a property in someone's will. In all cases, however, you must contact a lawyer and HMRC. 

Find out more throughout mortgages and divorce. 

Comparing mortgages

Use this mortgage comparison tool from Habito if you're aloof at the research stage – or if you're appealing whether you're getting the best possible deal. Then speak to an advisor for honest advice about taking out a mortgage, help seeking out the best trades, and answers to queries you may have. They can use their citation know-how to negotiate the best mortgage deal based on your financial history and recent status.

Looking for more expert buying advice?

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