What is stamp duty and how much do I need to pay?

everything there is to know about stamp duty 2021

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What is stamp duty?

Stamp duty, also known as stamp duty land tax (SDLT), is a fee charged by the treasury that’s paid on property purchases. It applies to residential properties involved in sales over £125,000, and all non-residential properties or land in sales over £150,000.

When required, stamp duty must be paid by the buyer and once this payment is made, they are liable from that point on that the transfer of ownership is completed. Everyone is required to file their stamp duty return with HMRC and pay the amount within 14 days of this. If you have hired a solicitor or conveyancer, they are usually able to file the stamp duty for you and include it in their bill.

Who pays stamp duty?

Anyone who is purchasing a property valued over £125,000 is required to pay stamp duty. However, if you’re a first-time buyer, you are exempt from paying stamp duty on properties £300,000 or under.

Alternatively, anyone buying a second home of any value is required to pay stamp duty. Even if the property is less than £125,000. However, if you sell your previous residence within three years, some, or all of this can be claimed back.

Therefore, to put it simply, here is everyone who isn’t required to pay stamp duty:

  • Anyone purchasing a property for less than £125,000 who is buying their main residence.
  • First time buyers purchasing a property for less than £300,000.
  • Anyone in a situation where equity or property is transferred by the court, through divorce proceedings.
  • Those who acquire property through a will.

What is the stamp duty rates?

The stamp duty rates can vary between England, Scotland, Wales and Northern Ireland so it is important to check that you can looking at the correct rates.

Stamp duty in England and Northern Ireland

Property price Standard stamp duty rate (excluding first time buyers) Stamp duty rate for second and buy to let homes
£0 to £125,000 0% 3%
£125,000 to £250,000 2% 5%
£250,000 to £925,000 5% 8%
£925,000 to £1.5 million 10% 13%
Over £1.5 million 12% 15%

Stamp duty in Wales

Property price Standard stamp duty rate (excluding first time buyers) Stamp duty rate for second and buy to let homes
£0 to £180,000 0% 3%
£180,000 to £250,000 3.5% 6.5%
£250,000 to £400,000 5% 8%
£400,000 to £750,000 7.5% 10.5%
£750,000 to £1.5 million 10% 13%
Over £1.5 million 12% 15%

Stamp duty in Scotland

Property price Standard stamp duty rate (excluding first time buyers) Stamp duty rate for second and buy to let homes
£0 to £145,000 0% 3%
£145,000 to £250,000 2% 5%
£250,000 to £325,000 5% 8%
£325,000 to £750,000 10% 13%
Over £750,000 12% 15%

 

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