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Stamp Duty Calculator – Including First Time Buyers and Second Properties

Stamp Duty Calculator

Stamp Duty Calculator

What you need to know

When buying a house, you are required (in most circumstances) to pay a Stamp Duty Land Tax (SDLT) to HM Revenue & Customs.

The Stamp Duty surcharge is applicable on property purchases of £125,000 or more, or £40,000 or more in cases where the property is an addition to your main residence

Note, if you are buying with a mortgage your mortgage provider will probably not add the cost of Stamp Duty on to your mortgage so you will need to have that money ready when you buy.

Where your solicitor is acting on your behalf in the transaction, they will complete the Stamp Duty Land Tax (SDLT) application to Land Registry on your behalf upon finalising the transaction.

The rate of Stamp Duty differs depending on whether you are a first-time buyer, moving, or buying additional properties. The rates outlined are for residential purchases.

First-Time Buyer Stamp Duty

In 2016 the UK government announced stamp duty relief for first-time buyers for property up to the value of £300,000. For properties between £301,000 and £500,000 a 5% tax is levied on the proportion between the two figures and anything over £500,000 follows the table below.

Property Price SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

 

 

Buying a new home

Stamp Duty is calculated by applying the appropriate % to the relevant price bracket as per the worked example below

Property Price SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

 

If you buy a house for £275,000, the SDLT 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 SDLT = £3,750

 

Buying an additional / second property

In 2016 the UK Government announced that additional property in the UK will be subject to a 3% surcharge over and above the standard Stamp Duty rates on property over £40,000. This includes buy-to-let property.

If you have purchased your new home before completing on your previous residence you will need to pay Stamp Duty at the additional rate. You have 36 months to sell your main residence before you can no longer claim any refund.

 

Property Price SDLT rate
Up to £125,000 3%
The next £125,000 (the portion from £125,001 to £250,000) 5%
The next £675,000 (the portion from £250,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

 

 

Stamp Duty Q&A

Q ) How do I pay stamp duty?

  1. A) You have 30 days from the date of completion to pay stamp duty. Your solicitor will make arrangement for the total to be calculated and paid… in cases where there is an associated sale they will often take the SDLT payment out of the money you have received on the sale. Where there is no associated sae, your solicitor will want funds up front to ensure you don’t submit them late and risk fine and penalties.
  2. Q) What if I already own a property, but I am buying a second property with somebody who doesn’t?
  3. A) Even if just one of you already owns a home, when you are buying another one together, the 3% surcharge will still apply.

 

Q: I have never owned a property in the UK, but I own a holiday apartment in Spain. Am I still counted as a first-time buyer?

  1. A: No. Again the Treasury considers if you own property anywhere else in the  world that you are not a first-time buyer and so cannot be subject to  Stamp Duty Land Tax relief.

 

Q) How can I apply for a refund?

  1. A) You can apply online or complete one of HMRC’s repayment request forms (print it off and post it to HMRC) Refund applications will need to be received within three months of the sale (or if later within one year and 30 days of completion of the purchase).

 

Q) Does stamp duty apply to leasehold homes?

  1. A) In most cases, you will pay stamp duty on the purchase price of a leasehold home at the standard rates. But, if you are buying a brand new property which has a new lease, or an older property that has just been divided up and therefore new leases have been issued (known as ‘unassigned leases’), you may need to pay an additional stamp duty charge. This 1% extra charge will only apply if the total value of the rent you have to pay over the lifetime of the lease exceeds £125,000.

 

Q) Can you help your children to buy?

  1. A) Many customers want to help their children buy their first property. Traditionally, they’ve simply acted as guarantor on their child’s mortgage, meaning they were not part owners of the property.

Few Lenders Now Offer Guarantor Mortgages

However very few lenders now offer guarantor mortgages, so parents take out a joint mortgage with their child to help boost their affordability. As a condition of lending, most banks and building societies require parents to also put their name on the title deeds.

Parents buying jointly with their children will face the higher rates, although they can still give money for a deposit, or act as a guarantor for a mortgage, without becoming liable.