What is stamp duty and who pays stamp duty?

What is stamp duty?

Stamp duty is the common name for Stamp Duty Land Tax (SDLT) and it’s a tax you pay when you buy a property that’s above a certain price.

This blog focuses on SDLT for England and Wales. It’s different for Scotland, where it’s called Land and Buildings Transaction Tax (LBTT) and Wales, where’s it’s known as Land Transaction Tax (LTT).

As a start, here’s a quick comparison.

What is Stamp Duty Land Tax (SDLT) in England and Northern Ireland?

– This tax applies to property purchases in England and Northern Ireland.

– The amount you pay will depends on the price you pay for the property.

– The stamp duty also varies depending on your circumstances. For example, if you’re a first-time buyer, or if you’re buying a second property, in addition to your first.

– There are different rates for residential and non-residential properties, so a property that you plan to live in will have a different stamp duty from a property you plan to rent out.

What is Land and Buildings Transaction Tax (LBTT) in Scotland?

– LBTT is the equivalent of SDLT in Scotland.

– The structure and rates are similar to SDLT, with thresholds and rates that vary based on the price of the property and the status of the buyer.

What is Land Transaction Tax (LTT) in Wales?

– LTT applies to property purchases in Wales.

– It has its own set of rates and thresholds, which also depend on the property price and buyer circumstances.

What are the SDLT (stamp duty) rates for England and Northern Ireland?

As of June 2024, the SDLT rates for residential properties in England and Northern Ireland are the following percentage of the final sale price.

£0 – £250,000: 0%
£250,001 – £925,000: 5%
£925,001 – £1,500,000: 10%
Over £1,500,000: 12%

What is the SDLT (stamp duty) for a first-time buyer in England and Northern Ireland?

First-time buyers pay no stamp duty on properties up to £425,000 and benefit from reduced rates on properties up to £625,000.

What is the stamp duty for additional properties in England and Northern Ireland?

If you buy a property in England and Northern Ireland that’s in addition to your main residential home, there is an additional stamp duty to pay.

For second homes, holiday homes or buy-to-let property there is usually a 3% surcharge on top of the standard rates.

What are the LBTT (Land and Buildings Transaction Tax) rates for Scotland?

As of June 2024, the LBTT rates for residential properties in Scotland, are the following percentage of the final sale price.

£0 – £145,000: 0%
£145,001 – £250,000: 2%
£250,001 – £325,000: 5%
£325,001 – £750,000: 10%
Over £750,000: 12%

First-time buyers may benefit from a higher zero-rate threshold.

What are the LTT (Land Transaction Tax) rates for Wales?

As of June 2024, the LTT rates for residential properties in Wales are the following percentage of the final sale price.

£0 – £180,000: 0%
£180,001 – £250,000: 3.5%
£250,001 – £400,000: 5%
£400,001 – £750,000: 7.5%
£750,001 – £1,500,000: 10%
Over £1,500,000: 12%

First-time buyer reliefs and additional property surcharges may apply, similar to SDLT and LBTT.

Can stamp duty rates change?

Yes, the rates can change, based on government policy and budget announcements. The thresholds at which rates are payable can also change, so it’s important to check the latest government website information or consult a professional when planning a property purchase.

Where can I find more details about stamp duty?

For England and Northern Ireland, you can find more details –https://www.gov.uk/stamp-duty-land-tax

For Scotland, you can find more details – https://www.gov.scot/policies/taxes/

For Wales, you can find more details – https://www.gov.wales/land-transaction-tax-guide

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