Buying Property: What is Stamp Duty?

woman at laptop in cafe learning about stamp duty

Purchasing property in the UK involves various financial obligations, one of the most significant of which is stamp duty. Officially known as Stamp Duty Land Tax (SDLT), this is a tax paid on property purchases that can significantly affect the total cost of buying a home.

Understanding stamp duty—when it’s due, how much you’ll have to pay, and when you might be exempt—is crucial for anyone entering the property market.

This guide will walk you through everything you need to know about SDLT as you prepare to buy property.


What is Stamp Duty?

Stamp Duty Land Tax is a tax on property transactions in England and Northern Ireland. Scotland and Wales have their own versions, known as Land and Buildings Transaction Tax and Land Transaction Tax, respectively. In this article, we’ll focus on SDLT as it applies in England and Northern Ireland.

SDLT is payable when you buy a residential property or land over a certain price threshold. This tax is applicable whether you are buying outright, taking out a mortgage, or acquiring through another means such as a shared ownership scheme.


When is Stamp Duty Paid?

You must pay SDLT within 14 days of completing your property purchase. Completion means the date you take possession of the property. Delayed payment can result in penalties and interest charges.


How Much Do You Have to Pay?

The amount of stamp duty you pay depends on the purchase price of the property and whether it is your first home or an additional property.

Here are the key details as of the latest guidelines:

First-time Buyers: If you’re a first-time buyer in England or Northern Ireland and purchase a property up to £300,000, you pay no stamp duty. For properties costing between £300,001 and £500,000, first-time buyers pay 5% on the amount over £300,000.

Standard Rates: If you’re not a first-time buyer, stamp duty rates start at 0% on properties up to £125,000. From £125,001 to £250,000, the rate is 2%. From £250,001 to £925,000, the rate is 5%. The rate then increases to 10% on the portion from £925,001 to £1.5 million, and 12% on any value above £1.5 million.

Additional Properties: For those buying an additional property, such as a second home or a buy-to-let property, there is a 3% surcharge on top of the standard rates for each band.


Calculating Stamp Duty

Calculating the exact amount of stamp duty can be complicated, especially with the various thresholds and exceptions. Thankfully, the UK government and most major property websites offer online stamp duty calculators that can help you estimate how much you will need to pay based on the specifics of your property purchase.


Planning for Stamp Duty

When budgeting for a home purchase, it’s essential to include stamp duty in your calculations. This ensures you have enough funds to cover all costs associated with your transaction. Mortgage advisors or conveyancers can provide guidance and ensure you understand all the potential fees you will face when buying a home.



Stamp duty is a significant part of the cost of buying a property in the UK. Understanding how it works, knowing when you might be exempt, and preparing for its financial impact can make your property purchasing experience smoother and more predictable. As with all aspects of buying a home, it’s wise to seek professional advice to navigate the complexities of SDLT and ensure you are making the most informed decisions.


If you’d like help with an Agreement in Principle (AIP), your mortgage application, or protection products available, contact one of our friendly advisors who would be happy to have a chat and help guide you through it all.

Leave a Reply

Your email address will not be published. Required fields are marked *