STAMP duty is a tax that you need to pay when buying a house or a piece of land.

Not everyone will be liable for stamp duty as it's only applicable if the price of your new property is over a certain threshold.

But what are the rules of stamp duty and how much might you have to pay? We cover everything you need to know below.

What is stamp duty?

Stamp duty is a payment you'll need to make if you're buying a property or piece of land.

You pay the tax when you:

  • buy a freehold property
  • buy a new or existing leasehold
  • buy a property through a shared ownership scheme
  • are transferred land or property in exchange for payment, for example, you take on a mortgage or buy a share in a house

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The rate a buyer has to fork out depends on the price and type of property.

You only pay when you hit a certain threshold.

The current stamp duty thresholds are:

  • £250,000 for residential properties
  • £425,000 for first-time buyers buying a residential property worth £625,000 or less
  • £150,000 for non-residential land and properties

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If you buy a property for less than these thresholds, then you don’t have to pay the tax. 

Who pays for stamp duty right now?

Home buyers always pay for stamp duty, not the seller.

This is often done through a solicitor on your behalf as part of the buying process, according to HomeOwnersAlliance.

Home buyers have fourteen days from the date of purchasing a property to file a return to HMRC with any stamp duty due.

How much stamp duty will I pay?

Not everyone pays the same amount. 

If you are a first-time buyer you can get a discount if the following applies to you: 

  • You, and anyone else you’re buying with, are first-time buyers
  • The purchase price is £625,000 or less

Those who aren't first-buyers will pay different rates depending on the value of their new home:

  • If it's up to £250,000 – no stamp duty is paid
  • For the next £675,000 (the portion from £250,001 to £925,000) – stamp duty is charged at 5%
  • For the next £575,000 (the portion from £925,001 to £1.5million) – stamp duty is charged at 10%
  • For the remaining amount (the portion above £1.5million) – stamp duty is charged at 12%

How much you pay depends on whether the land or property is residential use or non-residential or mixed-use.

There’s a long list of different types of non-residential or mixed-use properties, such as shops, offices and agricultural land.

The government’s Stamp Duty Land Tax Calculator can be used to understand what you should pay.

How and when do I pay stamp duty?

Buyers will need to send a stamp duty return to HMRC and pay the tax within 14 days of completion.

If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees.

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If they do not do this for you, you can file a return and pay the tax yourself on Gov.UK.

You may be charged penalties and interest if you do not file your return and make your payment within 14 days of completion.

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