How does stamp duty work?
In short, if you’re buying a residential home in the UK worth over £125,000, you’ll have to pay stamp duty land tax on your purchase. Whether you’re buying outright or with a mortgage, stamp duty land tax will still apply.
How much is stamp duty?
There isn’t one standard stamp duty charge for every house in the UK. Stamp duty has several rate bands, and how much you pay will be calculated on the part of the property purchase price falling within each band.
Here is an example of buying a home worth £275,000:
- On the first £125,000 0% £0
- On the next £125,000 2% £2500
- On the final £25,000 5% £1250
Total Stamp Duty Land Tax payable: £3750
*Residential leasehold properties are charged differently.
So, although it may sound like 'just another tax' to pay, the amount you'll be charged will depend on the property you buy.
Usually, you have 14 days after the date you completed the purchase of your home (completion day/the day you move in) to pay your stamp duty land tax. Typically, your solicitor will deal with your stamp duty and any payment due, although you can do it yourself.
You can find out more about the ‘how’s, who’s and why’s’ of filling in your stamp duty land tax return on the Government website.