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Stamp Duty: Everything you need to know

Lydia Fitzsimons
Lydia Fitzsimons
  | Edited by Tom Church
Updated 11th September 2021

When you buy a property or piece of land in the UK you will most likely need to pay Stamp Duty Land Tax. In this guide, Latest Deals breaks down what exactly this is and everything else you need to know.

What is Stamp Duty?

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Stamp Duty Land Tax (SDLT) is the tax you pay to the government when you buy a property or piece of land in the UK. 

You will need to pay this tax if the property or land you’re buying costs more than a certain amount. 

This will vary depending on where you live in the UK, whether you’re a first-time buyer, whether you’re buying multiple properties, and when you buy the property or land. 

How much is Stamp Duty?

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The Stamp Duty threshold is when you need to start paying the tax. You don’t need to pay Stamp Duty if the property or land you’re buying costs less than the lowest threshold. These thresholds change according to the type of property you’re buying.

Date of purchaseResidential land & propertiesNon-residential land & properties
Present£250,000£150,000
1st October 2021 onwards£125,000£150,000

How much Stamp Duty do I need to pay?

How much Stamp Duty you pay will depend on whether the property you’re buying is residential, or non-residential.

There are bands depending on the price of the property or land you’re buying. You’ll pay a percentage based on which bands your property value falls into.

Stamp Duty rates vary depending on which part of the UK you’re buying in, and Stamp Duty has a different name in Scotland and Wales. 

The rates will also vary depending on whether you’re buying a main residence, or if you’re buying additional properties or land.

In England and Northern Ireland, the Stamp Duty holiday ends on the 30th September. This means the reduced rates will go back to normal from 1st October 2021. To get the reduced rates, you need to have completed on the property before then. The Stamp Duty holiday has already ended in Scotland and Wales.

Stamp Duty rates for England and Northern Ireland

Current bands with the Stamp Duty holiday (from 1st July to 30th September 2021):

Price of property / landMain residenceAdditional properties / land
Up to £250,000zero3%
From £250,001 to £925,0005%8%
From £925,001 to £1.5 million10%13%
Anything above £1.5 million12%15%

Rates from 1st October 2021:

Price of property / landMain residenceAdditional properties / land
Up to £125,000zero3%
From £125,001 to £250,0002%5%
From £250,001 to £925,0005%8%
From £925,001 to £1.5 million10%13%
Anything above £1.5 million12%15%

Stamp Duty rates for Scotland

Stamp Duty is called Land and Building Transaction Tax (LBTT) if you live in Scotland. LBTT works in the same way as Stamp Duty, but the bands are slightly different, and you pay it to Revenue Scotland.

Price of property / landMain residenceAdditional property / land
Up to £145,000zero4%
From £145,001 to £250,0002%6%
From £250,001 to £325,0005%9%
From £325,001 to £750,00010%14%
Anything Over £750,00012%16%

Stamp Duty rates for Wales

In Wales, you will need to pay Land Transaction Tax (LTT). It functions in the same way as Stamp Duty, but the bands differ, and you pay Land Transaction Tax to the Welsh Revenue Agency (WRA).

Price of property / landMain residenceAdditional property / land
Up to £180,000zero4%
From £180,001 to £250,0003.5%7.5%
From £250,001 to £400,0005%9%
From £400,001 to £750,0007.5%11.5%
From £750,001 to £1.5 million10%14%
Anything over £1.5 million12%16%

How to calculate Stamp Duty

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You can pay tax from multiple bands depending on how much the property or land you’re purchasing is.

So for example, if you were buying a house for £500,000 before 1st October 2021 in England, you would pay nothing on the first £250,000, and then 5% on the remaining £250,000. 

You can use an online Stamp Duty calculator to work out how much tax you will owe. It’s best to use the official government websites for a more accurate estimate.

If you’re buying residential property or land, the rate may be affected by a few factors:

  • Whether you’re a first time home buyer
  • Whether you already own property and you’re buying another
  • Whether you’re a UK resident 

Stamp Duty for first-time buyers

If you’re a first-time home buyer, you might be able to lower the cost of the Stamp Duty you pay on your first residential property. This is called claiming relief. 

The relief discount you can claim will vary depending on where you live in the UK.

Multiple properties

If you’re buying an additional property resulting in you owning more than one residential property, normally you will have to pay a 3% surcharge on top of the Stamp Duty rates for multiple properties. 

You can use the stamp duty tax calculators linked above to see how much tax you’ll pay on a second residential property, and the Stamp Duty rates in the tables for England and Northern Ireland, Scotland and Wales. 

IMPORTANT NOTE: If you exchanged contracts before 26th November 2015 you may be exempt from this.

Stamp Duty for non-UK residents

To see whether this applies to you, you first need to determine whether you’re classed as a UK resident when it comes to Stamp Duty.

If you have spent more than183 days out of the UK during the year prior to purchasing a property in the UK, you will be classed as a non-UK resident.

There is a 2% fee on top of any Stamp Duty fees for non-UK residents buying residential property in England or Northern Ireland after 1st April 2021.

There are some exemptions to this and you can read more about who has to pay this surcharge and how to claim relief on this here. 

When do you have to pay Stamp Duty?

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You need to pay Stamp Duty within 14 days of completing on the property or land you’re buying in England and Northern Ireland, or within 30 days of completion for properties and land in Scotland and Wales.

How do you pay Stamp Duty?

If you’ve bought the land through an agent, conveyancer or lawyer, usually they will handle this for you. They will pay the Stamp Duty and add the amount on to their fees. Typically they’ll apply for any relief discounts on your behalf as well, for example if you’re a first-time buyer. 

You can read our guide on What Does a Conveyancer Do here.

IMPORTANT NOTE: Stamp Duty is your responsibility, so you need to double check that your agent, lawyer or conveyancer has handled it on your behalf. 

How to file a Stamp Duty Return

How you file a Stamp Duty return, and how you pay any fees owed will depend on where you live in the UK.

England and Northern Ireland

When you buy property or land, it’s your responsibility to tell HMRC. It’s important that you ensure your agent, conveyancer or lawyer have done this on your behalf.

You can check they have filed and paid the Stamp Duty by asking for the Unique Transaction Number (UTN). The UTN is a unique 11 digit reference for your fee. Once you have the UTN, you can call HMRC and confirm with them that they received the payment.

If they have not filed this on your behalf, or they fail to tell you the UTN number, you can file a Stamp Duty return with HMRC. You need to do so within 14 days of completing, or you may incur penalties

 Even if you don’t need to pay Stamp Duty (for example if you’re buying your first property for less than £125,000) you still need to file a Stamp Duty Return with HMRC.

You can do this by ordering a form online, filling it in, and returning it. This is called a SDLT1 form, and you can request a form here. You can also request it by calling 0300 200 3511.

The SDLT1 form can take up to 2 weeks to arrive, so make sure you request it with plenty of time to avoid late penalties. Each SDLT1 form has a UTN, so photocopies of it won’t be permitted. 

The SDLT1 form comes with a payment slip. You can either use it to include payment, or let HMRC know how you will be paying, for example by online banking or over the phone.

IMPORTANT NOTE: Bank transfers can take up to 3 days to go through, so it’s important to make the payment with plenty of time. If HMRC don’t receive the payment within 15 days of completion, you may incur penalties and interest charges.

Scotland

Similarly to England and Northern Ireland, it is your responsibility to make sure any Land and Buildings Transactions Tax (LBTT) fees are paid. If you’re buying property or land in Scotland, you will pay LBTT to Revenue Scotland, and you have 30 days following completion on the property to pay.

Usually your lawyer, conveyancer or agent will handle this for you, but it’s important to check that they have. You can do this by requesting your transaction reference number from them, and then ringing Revenue Scotland to confirm that they have received your payment.

If they have not done this on your behalf, you can do it yourself.

To do this, you need to go to Revenue Scotland and request an online return. Once you have this, you can find your transaction reference number, a 13 digit unique code that usually begins with ‘RS’. You can then make a bank transfer, or pay over the phone. You can find more information on Revenue Scotland’s bank details here.

IMPORTANT NOTE: Bank transfers can take up to three days to go through, so make sure you take this into account when paying. If Revenue Scotland doesn't receive payment within 30 days of completion on the property, you may face penalties or interest charges.

Wales

If you’re buying property or land in Wales, Land Transaction Tax (LTT) should be paid to the Wesh Revenue Authority (WRA). LTT must be paid within 30 days of completing on the purchase.

Usually, your solicitor, conveyancer or agent will handle the filing and payment of LTT and add the cost to their fee. However, it is your responsibility to pay LTT, so it’s important to check it has been paid. You can do this by requesting your UTN and then ringing the WRA to confirm they have received your payment.

If your solicitor, conveyancer or agent does not handle this for you, you can do it yourself.

You can do this by registering a transaction on the WRA’s website and filing a paper tax return. This is a form that can be completed online. Once this has been completed, your paper tax return will be processed and then the WRA will send you your UTN. NOTE: If you don’t have enough time to wait for your UTN, you can use this reference number: postcode \ surname of buyer, for example “CF103RB \ Smith”.

If you can wait for your UTN, once you have received it, you can pay online through a bank transfer, or over the phone. You can find payment details for the WRA here.

IMPORTANT NOTE: It can take up to 3 days for bank transfer payments to be received, so make sure you act with plenty of time to spare. If the WRA does not receive your LTT payment within 30 days of completion, you may face penalties or interest charges.

Special rates, considerations and exemptions

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You don’t need to pay Stamp Duty if the land or property you’re buying is less than the band threshold. You will still need to file a Stamp Duty return if you’re buying in England or Northern Ireland, a paper tax return in Wales, or an online return in Scotland.

You don’t need to file a return for the following reasons:

  • Land or property is given as a gift.
  • You buy using an alternative form of property finance, for example using a Sharia law compliant mortgage.
  • The free-hold property costs less than £40,000.
  • You purchase a new or assigned lease of more than seven years, providing the premium is £40,000 or less, and the annual rent is less than £1,000.
  • You purchase a new or assigned lease of less than seven years which falls below the Stamp Duty threshold.
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