Stamp Duty

Stamp Duty Land Tax (SDLT) is an essential consideration for anyone buying property in England and Northern Ireland. This tax applies to residential and non residential properties, and the amount owed depends on factors such as purchase price, first-time buyer status, and whether you already own another property.

The rates and thresholds mentioned in the blog are only effective until 31st March 2025 and will change from 1st April 2025. Please note that there is no guarantee any mortgage may be completed before 31st March 2025.

Who Pays Stamp Duty?

If you are buying a residential property costing over £250,000 (or £425,000 for first-time buyers), you will be required to pay stamp duty. The percentage increases in bands based on the property's value.

Stamp Duty Rates (2024)

• Up to £250,000 – 0%

• £250,001 - £925,000 – 5%

• £925,001 - £1.5 million – 10%

• Over £1.5 million – 12%

For additional properties (buy-to-let or second homes), a 5% surcharge applies on top of these standard rates.

Exemptions and Reliefs

• First-Time Buyers Relief: If purchasing a home up to £425,000, first-time buyers pay no stamp duty on the first £425,000 and only 5% on the remainder up to £625,000.

• Shared Ownership Schemes: Special SDLT rules apply.

• Transfers due to Divorce or Inheritance: These transactions may be exempt.

How to Pay Stamp Duty

Payment is due within 14 days of completion. Your solicitor usually handles this, ensuring compliance. Failing to pay on time may result in penalties.

Planning for Stamp Duty Costs

For buyers planning their budget, stamp duty can significantly impact overall costs. Many mortgage lenders allow you to add SDLT to your mortgage, but this increases the amount you borrow and the interest payable. Instead, it is often advised to factor SDLT into your savings or purchasing budget beforehand.

Stamp Duty for Buy-to-Let Investors

Property investors and landlords should also consider the stamp duty implications when expanding their portfolios. The 5% surcharge applies to all additional properties, and if you plan to sell your primary residence later, it is possible to claim back the surcharge if the property is sold within a set timeframe.

Stamp duty is a key part of property buying in the UK, and understanding how it works ensures that you avoid unexpected costs. Seeking advice from a financial adviser can help make the process smoother.

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