It’s a tax that people who buy property or land must pay. In England and Northern Ireland buyers pay Stamp Duty Land Tax, in Scotland it is Land and Buildings Transaction Tax while in Wales buyers pay Land Transaction Tax.
In England and Northern Ireland the tax falls due on homes sold for £125,000 or more. However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.
For people who have bought a home before, the rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.
So if you are not a first-time buyer, and you buy a house for £275,000, the Stamp Duty you owe is calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £25,000 = £1,250
- Total Stamp Duty = £3,750