The amount of stamp duty you’ll need to pay depends on the purchase price of the property and where it’s located in the UK. Residents of England and Northern Ireland, take note – no stamp duty is applicable on the first £250,000 of a property purchase as long it is your primary residence.
What is Stamp Duty land tax?
If you are looking to purchase land or property in the UK, be aware that the chances are that stamp duty land tax will be required. Depending on which part of the UK you buy from, this fee may be referred to as:
- Stamp Duty (England and Northern Ireland)
- Land and Buildings Transaction Tax (LBTT) for Scotland
- or Land Transaction Tax (LTT) for Wales.
Stamp Duty Rates in the UK
When buying a house in the UK, the stamp duty rate you pay will vary drastically depending on which region of the country it is located in. In England and Northern Ireland, the same fee applies; however, Wales and Scotland both have their own unique rates.
Stamp Duty Rates in England and Northern Ireland
Did you know that if your primary residence is located in England or Northern Ireland, there’s no stamp duty tax on the first £250,000 of a property (this doesn’t include additional properties)? Plus, if you’re a first-time buyer then this tax exemption rate rises on any purchase price to an even higher threshold of £425,000!
Here are the stamp duty rates:
Stamp duty rates (England & Northern Ireland)
| Purchase Price | Rate on Main Residence | Rate for Additional Properties |
|---|---|---|
| Up to £250,000 ( £425,000 for first-time buyers) | 0% | 3% |
| £250,001 – £925,000 | 5% | 8% |
| £925,001 – £1,500,000 | 10% | 13% |
| £1,500,001 + | 12% | 15% |
Stamp Duty Rates in Scotland
In Scotland, Land and Buildings Transaction Tax is applied instead of stamp duty, and it uses a different rate system. Here are the rates you’ll need to pay on the property price:
Land & buildings transaction tax rates (Scotland)
| Purchase Price | Rate on Main Residence | Rate for Additional Properties |
|---|---|---|
| Up to £145,000 ( £175,000 for first-time buyers) | 0% | 4% |
| £145,001 – £250,000 | 2% | 6% |
| £250,001 – £325,000 | 5% | 9% |
| £325,001 – £750,000 | 10% | 14% |
| £750,001 + | 12% | 16% |
Stamp Duty Rates in Wales
In Wales, Land Transaction Tax LTT is applied instead of stamp duty, and it also uses a different rate system. Here are the rates you’ll need to pay:
Land transaction tax rates (Wales)
| Purchase Price | Rate on Main Residence | Rate for Additional Properties |
|---|---|---|
| Up to £225,000 | 0% | 4% (on the portion up to £180,000) 7.5% (on the portion between £180,001 and £250,000) |
| £250,001 – £400,000 | 6% | 9% |
| £400,001 – £750,000 | 7.5% | 11.5% |
| £750,001 – £1,500,000 | 10% | 14% |
| £1,500,001 + | 12% | 16% |
Stamp duty calculator
Use the below stamp duty calculator to work out how much stamp duty you will need to pay for your property purchase. Following this, feel free to get in touch with our fee-free mortgage advisors to talk about stamp duty in relation to your property purchase and mortgage.
Stamp Duty for First-Time Buyers
Thoroughly understanding the precise amount of stamp duty required to be paid by a first-time buyer, with all applicable ‘relief’ in England, Northern Ireland, and Scotland can be quite daunting. Below is a breakdown of what stamp duty you can expect to pay as a first-time buyer if any.
How much stamp duty does a first-time buyer pay?
Working out exactly how much stamp duty a first-time buyer needs to pay with the extra ‘relief’ available in England, Northern Ireland, and Scotland can be confusing. Here’s what you need to know: First Time Buyer Stamp Duty Explained
When Must I Pay Stamp Duty and How Can I Do It?
If you’re buying in England or Northern Ireland, you have 14 days from the date of completion/date of entry (when all the contracts are signed and dated, and you get the keys – read our guide on what happens between exchange and completion for a full breakdown of the process) to pay stamp duty. In Scotland and Wales, you have 30 days.
If you take longer than the required timescales, you could face a fine and possibly interest on top of the stamp duty tax, so don’t!
In reality, your conveyancing solicitor will probably sort this out and push you to pay the bill straightaway – in fact, most tend to want the funds available before completing the property purchase for you, just in case you then can’t or don’t pay them.
How Do I Pay Stamp Duty in England and Northern Ireland?
In case your solicitor doesn’t do this for you, here’s what you need to do:
- Find your unique transaction reference number (UTRN). It’s 11 characters long and found on your submission receipt if you have filed online or on your paper stamp duty return.
- Pay online or by mobile banking. Just as you might move money to a pal’s account, you can transfer the money online or by mobile banking using HM Revenue & Customs’ bank details. Bacs payments normally take three working days, so take this into account and don’t miss the deadline, while CHAPS payments usually arrive on the same working day.
- Other ways to pay. If you don’t have online or mobile banking set up, you can pay by debit card (but not credit card), by cheque or cash in most banks, or by cheque via post.
How Do I Pay Land and Buildings Transaction Tax in Scotland?
Again your solicitor is likely to stamp duty land tax for you. Here you need to pay Revenue Scotland, and you have 30 days to pay up.
If your solicitor doesn’t do this for you, here’s how you can do it yourself:
- Submit an online return registering the transaction. You’ll need to go to Revenue Scotland’s site to do this.
- Find your transaction reference. It’s 13 characters long, beginning with ‘RS’. You can find it on the receipt for your online return.
- Pay online or by mobile banking. Just as you might move money to a pal’s account, you can transfer the money online or by mobile banking using Revenue Scotland’s bank details. You can use Faster Payments, Bacs or CHAPS. Remember, if you’re using Bacs, the transfer could take three working days, so don’t miss your payment date.
How Do I Pay Land Transaction Tax in Wales?
In Wales, land transaction tax is paid to the Welsh Revenue Authority. This is payable within 30 days of you completing on your property.
If you have a solicitor, they’ll usually file your return, pay the tax on your behalf if you ask them to, and add the amount to the sum you pay them.
If you need to pay stamp duty tax yourself, here’s how to do it:
- Submit a return registering the transaction: You’ll need to go to the Welsh Revenue Authority’s (WRA) site and submit a tax return registering the transaction. This can either be done online or via post.
- Find your unique transaction reference number (UTRN): After you’ve submitted your return, you will not be given a UTRN immediately. It will be sent to you once your return has been processed by the WRA. If you’ve not got enough time to wait for your UTRN to be issued, you can instead use the following payment reference number: “Postcode of land \ surname of buyer”. For example: “CF379EH \ Bloggs”.
- Pay online or by mobile banking: Just as you might move money to a pal’s account, you can transfer the money online or via mobile banking using the WRA’s bank details. You can use Faster Payments, Bacs or CHAPS. Remember to include the reference (as explained above) in the payment reference section. If using BACS, the WRA must have your payment four working days before the payment due date, so that it can be processed.
- Pay by cheque: You’ll need to make the cheque payable to the ‘Welsh Revenue Authority’ and add the UTRN or payment reference number on the back of the cheque. The cheque must be received 10 days before the stamp duty payment is due, and you’ll need to send it to: Welsh Revenue Authority, PO Box 110, Pontypridd, CF37 9EH.
Can I Add Stamp Duty to My Mortgage?
The simple answer here is that it’s best that you don’t, but many people find that they have to when they are selling and buying to keep the upfront moving cost needed as low as possible.
To add the cost of stamp duty to your mortgage means a bigger mortgage debt. So, say you needed a £180,000 mortgage to purchase a house costing £300,000, but wanted to add the stamp duty, you’d need to request borrowing of £182,500 (in Northern Ireland or England ), then use your ‘extra’ deposit money to pay the stamp duty.
There are two main things to consider before adding stamp duty to your mortgage:
- Firstly, as mortgages tend to be taken out over a long term (25 years or more), that’s normally how long the stamp duty borrowing will last too. Over a 25-year term at a rate of 5%, that extra £2,500 borrowing will cost about £6,000 in interest, so it’s vital to be aware of the cost.
- Secondly, this could affect your loan-to-value ratio (LTV) – the measure of how much of a property’s value you are borrowing. The most competitive deals require a maximum LTV of 60%, yet in the example above, adding the stamp duty would push you from 60% to almost 62%, so be careful – speak to a mortgage broker to see if it’s the right decision.
Concluding on stamp duty
Stamp duty can add a significant cost to your property purchase, but it’s important to understand what you need to pay and when. The rates of stamp duty differ depending on where in the UK you’re buying, and there are additional reliefs available for first-time buyers. Make sure to use a stamp duty calculator to determine how much you’ll need to pay, and don’t forget to factor in the other costs associated with buying a property.
Stamp duty is just one of the many property costs you’ll need to factor in when buying a main residence, a residential property, or a buy-to-let property (buy-to-let stamp duty). Other costs include:
- Mortgage arrangement fees
- Valuation fees
- Survey costs
- Legal fees
- Removal costs
- Renovation or repair costs
Make sure to budget for all these costs when planning to buy a property and make sure to read our guide on How much does it cost to move house? It’s also a good idea to speak to a financial advisor or fee free mortgage broker to get a better idea of how much you can afford to borrow and what your monthly repayments will be.
In conclusion, stamp duty is an unavoidable cost when buying a property in the UK, but the amount you’ll need to pay depends on the price of the property and where it’s located. Use our stamp duty calculator to get an idea of how much you’ll need to pay. Remember to also budget for the other costs associated with buying a property, and speak to a financial advisor or mortgage broker to help you make the best decision for your financial situation.
