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What is stamp duty?

What is stamp duty?

Most people will need to pay stamp duty land tax – stamp duty for short – when buying property. Stamp duty is a tax on land and property transactions – if you buy house or flat worth over £125,000 you will need to pay it unless you’re a first-time buyer.

How much Stamp Duty Land Tax (SDLT) you pay when you buy a property depends on:

  • whether the property is residential
  • how much of the property price price falls within each tax threshold

You can see current stamp duty rates below:

0% stamp duty for a property valued between £0 – £125,000
2% stamp duty  on the next £125,000 (the portion from £125,001 to £250,000)
5% stamp duty on the next £675,000 (the portion from £250,001 to £925,000)
10% stamp duty on the next £575,000 (the portion from £925,001 to £1.5 million)
12% stamp duty on the remaining amount (the portion above £1.5 million)

If the property you’re purchasing is a buy to let investment you’ll need to use our buy to let stamp duty calculator.

You will usually have 30 days from ‘completion’ of a purchase to pay stamp duty – although if you move into your new home or pay for it before completion the 30 days starts from then.

If you use a solicitor during your house purchase they will probably sort out the stamp duty payment for you. But it is legally your responsibility, so it doesn’t hurt to double check you have paid the right amount.

First time buyers and stamp duty – Autumn Budget 2017

Since the 2017 Autumn Budget Statement, if you’re a first-time buyer, you won’t need to pay stamp duty if you’re buying a house or flat worth less than £300,000.

If the home you’re purchasing is worth between £300,000 – £500,000, you’ll be charged stamp duty at 5% for the excess.

For homes with a property price of more than £500,000, you will pay stamp duty at the standard rates.

Stamp duty exemptions

There are very few occasions where people purchasing property worth over £125,000 are exempt from stamp duty.

Even if two people engaged in a property swap they would have to pay stamp duty on the market values of the homes they were taking on.

The only situations where you may be exempt are where a share of a property is being transferred between two people. For example this would include a transfer of a share from one partner to another after a divorce or if someone has left their share of property to someone in their will. But this is something you should check with a solicitor or the tax authorities.

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