What is stamp duty and when do you pay it?
11/10/2019
823
5 min read
Stamp Duty Land Tax (SDLT) is the tax charged by the Government on a home buyer when you buy a home in England and Wales. The tax payable depends on:
- What is the consideration for example the purchase price of the property?
- Are you a First Time Buyer?
- Do you already own another property?
- Are you a a UK resident?
When do you pay stamp duty?
Stamp Duty must be paid within 14 days of the completion of the transaction.
NB The calculator also factors in First Time Buyer stamp duty relief for England (no equivalent for purchases in Wales, which has a different regulator, The Welsh Treasury - click to use our Welsh Stamp Duty Calculator
*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels
Read about historic stamp duty rates
How much is stamp duty?
In England and Wales, stamp duty rates are paid on the part of the property price within each tax band.
| Purchase Price | New stamp duty rates paid on the part of the property price within each tax band |
|---|---|
0 - £125,000 | Zero |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| More than £1.5 million | 12% |
Example 1: I don't own another property and am buying for £505,000. How much stamp duty do I pay?
- Nothing on the first £125,000
- 2 % of the value from £125,001 - £250,000 = £2,500
- 5% of the value from £250,001 - £505,000 = £12,750
- Total Stamp Duty payable = £15,250
Example 2: I don't own another property and am buying for £165,000. How much stamp duty do I pay?
- Nothing on the first £125,000
- 2% of the value from £125,001 - £165,000 = £800
- Total Stamp Duty payable = £800
Historic Stamp Duty Rates
The history of stamp duty as a tax dates back to the 1600s although the current system regarding house purchases was largely started in the 1950s. What follows details rate changes in the last few decades.
13 March 1984
The following rates covered years 1984, 1985, 1986, 19887, 1988, 1989, 1990 and 1991.
Rate | Charge Band |
|---|---|
0% | Up to £30,000 |
1% | Over £30,000 |
20 December 1991
Due to the recession, then Chancellor Nigel Lawson increased the stamp duty threshold to stimulate demand (i.e. he raised the property value at which the tax kicked in to encourage more people to buy and encourage more sales volumes)
Rate | Charge Band |
|---|---|
0% | Up to £250,000 |
1% | Over £250,000 |
20 August 1992
As demand grew, the previous change was reversed to discourage negative effects, particularly inflation
Rate | Charge Band |
|---|---|
0% | Up to £30,000 |
1% | Over £30,000 |
16 March 1993
With average house prices increasing, the Government decided to double the threshold at which the tax started, once again to stimulate demand (although by using less quantity than previously)'; these rates continued to apply in 1994,1995 and 1996.
Rate | Charge Band |
|---|---|
0% | Up to £60,000 |
1% | Over £60,000 |
8 July 1997
The country elected a new Labour government which introduced higher bands to increase the tax take to help cover its spending plans.
Rate | Charge Band |
|---|---|
0% | Up to £60,000 |
1% | Over £60,000 and under £250,000 |
1.5% | Over £250,000 and under £500,000 |
2% | Over £500,000 |
24 March 1998
The government increased rates again less than a year later.
Rate | Charge Band |
|---|---|
0% | Up to £60,000 |
1% | Over £60,000 and under £250,000 |
2% | Over £250,000 and under £500,000 |
3% | Over £500,000 |
16 March 1999
In the following year's budget, the rates were increased again.
Rate | Charge Band |
|---|---|
0% | Up to £60,000 |
1% | Over £60,000 and under £250,000 |
2.5% | Over £250,000 and under £500,000 |
3.5% | Over £500,000 |
28 March 2000
And again at the budget in 2000 the rates increased, and they stayed the same during 2001, 2002, 2003, 2004.
Rate | Charge Band |
|---|---|
0% | Up to £60,000 |
1% | Over £60,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 |
17 March 2005
The government doubled the base threshold from £60,000 to £120,000 to help first time buyers onto the housing ladder.
Rate | Charge Band |
|---|---|
0% | Up to £120,000 |
1% | Over £120,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 |
23 March 2006
The government again raised the threshold in its Spring budget but by only £5,000. This applied during 2006, 2007 and up to September 2008.
Rate | Charge Band |
|---|---|
0% | Up to £125,000 |
1% | Over £125,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 |
3 September 2008
The government took action to combat the Credit Crunch by giving a stamp duty holiday for the basic threshold. This holiday started on 3 September 2008 and finished on 31 December 2009.
Rate | Charge Band |
|---|---|
0% | Up to £175,000 |
1% | Over £175,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 |
Rates as from 1 January 2010
The government cut the threshold back to the original amount in place before the 'holiday' period.
Rate | Charge Band |
|---|---|
0% | Up to £125,000 |
1% | Over £125,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 |
Rates from 25 March 2010
In a pre-election budget, the Chancellor Alistair Darling announced a new threshold for first-time buyers to stimulate demand. For first-time buyers only, the stamp duty rate was 0% for properties up to a value of £250,000 with all other bands and rates staying the same.
Rates from April 2010
The Government introduced a new rate for homes sold for more than £1,000,000, up to 31 December 2011.
Rate | Charge Band |
|---|---|
0% | Up to £125,000 |
1% | Over £125,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 and under £1,000,000 |
5% | Over £1,000,000 |
Rates as from 1 January 2012
The first time buyer rate is taken away.
Rates from 21 March 2012
The Government introduced a new 7% rate for property sales over £2,000,000. There were no changes in 2013.
Rate | Charge Band |
|---|---|
0% | Up to £125,000 |
1% | Over £125,000 and under £250,000 |
3% | Over £250,000 and under £500,000 |
4% | Over £500,000 and under £1,000,000 |
5% | Over £1,000,000 and under £2,000,000 |
7% | Over £2,000,000 |
Current Rates and Structure from 3 December 2014
Stamp duty at this point became payable only on the portion of value of the bracket the value fell into - it was the end of the old slab system which attracted much criticism for unfairness.
So the first £125,000 of a property purchase became completely tax-free. The next £125,000 was payable at 2% (or £2,500) etc.
The Government made no changes to core property taxes during 2015.
Rate | Charge Band |
|---|---|
0% | Up to £125,000 |
2% | Over £125,000 and under £250,000 |
5% | Over £250,000 and under £925,000 |
10% | Over £925,000 and under £1,500,000 |
12% | Over £1,500,000 |
*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels
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