tamp Duty is calculated based on the value of the home. This table explains how the rate you pay varies depending on the price of the property.
First Time Buyers,
First time buyers purchasing their first home for £425,000 or less will pay no SDLT. Where the purchase price is over £425,000 but does not exceed £625,000 they will pay 5% on the amount above £425,000.
| Purchase Price (Main Residence) | Stamp Duty Rate |
|---|---|
| £0 – £250,000 (£425,000 for first-time buyers) | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1.5m | 10% |
| £1.5m+ | 12% |
Making Sense of the Price Brackets
If you buy a property for £400,000 as your main residence, the Stamp Duty would be:
0% on the first £250,000
5% on the remaining £150,000 (£5,000)
So in total you would pay £5,000.
Stamp Duty—or Stamp Duty Land Tax (SDLT) in official terms—is charged to buyers when purchasing a residential property or a piece of land that costs over £250,000. This tax applies to both freehold and leasehold properties, whether you’re buying outright or with a mortgage.
Thinking about buying a home? Navigating the housing market can be a little daunting, especially for first-time buyers. There are several things to consider, such as the ideal location, type of property, budgeting, securing a mortgage, understanding the legal aspects involved, and ensuring that your chosen property meets your current and future needs. Test your knowledge and get ready to navigate your house-buying journey with confidence with our fun and informative quiz; see how well you really understand the house-buying process and identify your strengths and gaps.
If you are purchasing a property costing £40,000 or more, which is not considered your main residence, you must pay an increased rate of tax (or additional dwelling supplement) of 5%. Anything other than your main residence is classified as a’second home’. This could be a holiday let, a property bought as an investment, or somewhere you are helping another family member to buy—even if your main home is overseas. This charge does not apply to caravans, mobile homes, houseboats, or plots of land. It is important to remember that you will not be liable for the 5% surcharge if the property you are buying replaces your main residence, even if you own additional properties at the same time (such as a second home or a flat you rent out). If you dispose of your previous main residence within 3 years, you may be eligible for a refund. You must apply for any repayment within 12 months of disposing of your old main residence. However, this can be a complex area, and you should seek advice from a solicitor or conveyancer.
