Use our stamp duty calculator to instantly calculate the stamp duty (SDLT) payable in England and Northern Ireland
Stamp Duty Calculator
This stamp duty calculator provides you with an insight into your stamp duty liability when purchasing a freehold residential property.
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What is stamp duty?
Stamp Duty Land Tax (SDLT) is payable when you purchase a property or land in England and Northern Ireland. The tax is payable over a certain price and is charged at different rates depending on the thresholds, which we’ll detail below. The tax applies when you:
- Purchase a freehold property
- Purchase an existing or new leasehold
- Are transferred property or land in return for payment — for example, you purchase a share in a house or secure a mortgage
- Purchase a property via a shared ownership scheme
SDLT only applies in England and Northern Ireland. If you buy a property or land in Scotland, Land and Buildings Transaction Tax (LBTT) is payable. In Wales, Land Transaction Tax (LTT) applies.
An overview of the stamp duty changes
SDLT has undergone various changes and this is a quick overview for reference. Before December 2014, the rates were incremented at each threshold and based on the entire purchase price. After this date, the system was overhauled so that it became a progressive tax. Stamp duty rate increases only applied to the set threshold values. Relief for first-time buyers was introduced in November 2017.
On 8th July 2020, a stamp duty holiday came into effect as a result of the pandemic. It meant that residential purchases could be made up to a value of £500,000 without any stamp duty having to be paid. Originally set to end on 31st March 2021, the stamp duty holiday was extended to 30th June 2021.
On 1st July 2021, a transition period was introduced, reducing the zero-rate stamp duty threshold to £250,000. This ran until 30th September 2021. On 1st October 2021, the thresholds and rates returned to their original levels before the stamp duty holiday. This continued until 23rd September 2022 when the zero-rate threshold was then increased to £250,000 from £125,000.
The current stamp duty thresholds
Stamp duty is set into tax bands, which are known as the SDLT thresholds. Currently, these thresholds start at:
- £150,000 for non-residential properties and land
- £250,000 for residential properties
- £425,000 for first-time buyers purchasing residential properties with a value of £625,000 or less
For purchases with values that fall under the thresholds, no stamp duty is payable.
The amount you pay depends on two factors. These are whether or not:
- You are eligible for an exemption or relief
The property or land is to be used for residential purposes or for non-residential or mixed-use purposes
What are the stamp duty rates?
The current stamp duty rates applied when you buy a residential property are:
- £0–£250,000: 0%
- £250,001–£925,000: 5%
- £925,001–£1.5 million: 10%
- Above £1.5 million: 12%
For example, if you buy a home in Pimlico for £600,000, the amount you’ll have to pay in stamp duty is calculated as follows:
- 0% on the first £250,000: £0
- 5% on the remaining £350,000: £17,500
The total stamp duty payable for your property is £17,500.
Stamp duty on new leasehold sales and transfers
When purchasing a residential leasehold property, stamp duty is payable on the lease purchase price, known as the lease premium. The current stamp duty rates above apply to lease premiums. Should the net present value, which is the total rent over the life of the lease, be higher than the current threshold of £250,000, 1% is payable on the amount over £250,000. This doesn’t apply to existing leases.
Stamp duty for first-time buyers
As a first-time buyer, you benefit from relief on your stamp duty liability. No stamp duty is payable on a purchase price up to £425,000 and additional relief is available up to £625,000:
- £0–£425,000: 0%
- £425,001–£625,000: 5%
For example, if you buy your first home in Bexleyheath for £475,000, the first-time buyer stamp duty that’s payable is calculated as follows:
- 0% on the first £425,000: £0
- 5% on the remaining £50,000: £2,500
Therefore, the total stamp duty payable is £2,500.
If you buy a property with a value that’s over £625,000, you won’t be eligible for the relief and the normal stamp duty rates will apply.
Stamp duty rates for additional properties
When buying an additional residential property, such as a second home or a buy-to-let investment, a 3% stamp duty surcharge is payable. If you buy an additional property for less than £40,000, no stamp duty is payable. For a value between £40,001 and £250,000, 3% is charged. For values over £250,000, the 3% surcharge is owed in addition to the normal rates. Therefore, the thresholds are as follows:
- £0–£40,000: 0%
- £40,001–£250,000: 3%
- £250,001–£925,000: 8%
- £925,001–£1.5 million: 13%
- Above £1.5 million: 15%
This 3% surcharge doesn’t apply to mobile homes, houseboats or caravans.
What happens when you’re replacing your main residence?
When you’re moving home, the normal stamp duty rates apply as long as you’ve sold your original main residence. If you’re unable to sell it straight away, however, the stamp duty is calculated at the higher rate as you then own more than one property. You can claim a refund for the additional tax at a later date when the property has been sold. As long as you sell the property within 36 months of buying your new home, you can apply for a stamp duty refund up to 12 months later.
Should you be unable to sell your property within 36 months of buying a new home, some circumstances allow for an extension of the refund date. Provided that all of the following apply, you may be able to claim a refund for the additional 3% surcharge:
- Your new home was purchased on or after 1st January 2017
- You were unable to sell your original home within the time frame due to exceptional circumstances
- Your original home has now been sold
Stamp duty rates for non-UK residents
A 2% stamp duty surcharge is applied if you buy a residential property in England or Northern Ireland as a non-UK resident. You are classed as such if you haven’t lived in the UK for a minimum of 183 days during the 12 months before you buy the property. The extra 2% charge applies to freehold and leasehold properties. It’s charged in addition to the 3% surcharge when buying an additional property.
This extra 2% stamp duty charge for buyers living overseas was introduced in April 2021. Foreign investment in properties in London is high and this new surcharge may ease this slightly. For a non-UK resident buying an additional property that falls within the highest threshold, for example, a stamp duty charge of 17% is now payable. The aim of this surcharge is to try and keep the inflation of property prices under control so that UK buyers can get onto the property ladder or move up it.
Stamp duty for non-residential uses
Stamp duty rates differ for non-residential and mixed-use properties and land. A mixed-use property combines residential and non-residential aspects, such as a shop with a flat above it. As mentioned earlier, the stamp duty calculator featured here is for properties or land used for residential purposes only.
When paying £150,000 or above for non-residential or mixed-use property or land, the stamp duty charge is based on increasing portions of the purchase price. Non-residential property and land includes:
- Commercial property, such as offices or shops
- Property that’s uninhabitable
- Property or land that doesn’t belong to a dwelling’s grounds or garden
- Six or more residential properties that have been purchased in one transaction
- Agricultural land
- Forests
For agricultural land, residential stamp duty rates apply if it’s included as part of a dwelling’s grounds or garden.
Stamp duty rates for freehold sales and transfers
The stamp duty thresholds for freehold sales and transfers are:
- £0–£150,000: 0%
- £150,001–£250,000: 2%
- Above £250,000: 5%
Stamp duty rates for new leasehold sales and transfers
The stamp duty for non-residential or mixed leaseholds is payable on both the lease purchase price, which is calculated using the rates above, and the annual rent, which is known as the net present value (NPV). If you buy an existing lease, stamp duty is only paid on the lease price. The NPV is determined by the total rent over the entire lease. If it is less than £150,000, no stamp duty is payable on the rent, as follows:
- £0–£150,000: 0%
- £150,001–£5 million: 1%
- Above £5 million: 2%
If you make multiple transfers or purchases with the same seller, you may be liable for a higher stamp duty rate.
When do you pay stamp duty?
SDLT must be paid within 14 days of completing the purchase of your property. Usually, your solicitor, conveyancer or agent will do this for you and add the tax amount to their fees. If that’s not the case, you can file the return with HMRC and pay the tax yourself. However, it’s important to note that if you don’t file your SDLT return and make the payment within this 14-day time frame, you may incur interest and penalties.
Can you add stamp duty to your mortgage?
Whilst you can add your stamp duty cost to your mortgage loan, it’s not advisable. Doing so increases your mortgage debt and it may affect your loan-to-value (LTV) ratio. This is the amount you’re borrowing compared with the property’s value. Adding on the extra amount for stamp duty may push you out of one LTV bracket into the next one. This could result in you having to pay a higher interest rate.
You also need to bear in mind the loan term of your mortgage. Interest is charged on the loan throughout this term. If you add the stamp duty to it, you’ll pay interest on that throughout your loan term too. Over the entire period, the interest cost could be considerably more than the original stamp duty charge.
When is stamp duty not payable?
Aside from the exemptions we’ve already mentioned, there are some instances when stamp duty doesn’t have to be paid. These can include:
- A property has been left to you in a will
- No payment has been exchanged for a property or land transfer
- A property has been transferred to you due to a divorce, separation or dissolution of a civil partnership
- Alternative financial arrangements have been used regarding a property. For example, in compliance with Sharia law.
- You buy a new or assigned lease of at least 7 years. The premium must be under £40,000 and the annual rent must be less than £1,000.
- You buy a new or assigned lease of less than 7 years. The amount paid must be less than the residential or non-residential threshold.
The revenue gained from stamp duty
The government’s stamp duty revenue between 2020 and 2021 drastically declined. This was due to the introduction of the stamp duty holiday as a way to boost the economy and stimulate the housing market. The revenue from SDLT in that financial year totalled £8,670 million. However, the revenue for the following financial year of 2021 to 2022 increased by 63%. This meant that £14,100 million was generated by SDLT.
Stamp duty in Scotland
In Scotland, Land and Buildings Transaction Tax (LBTT) is charged. It’s similar to SDLT in that tax thresholds have been set rather than tax being payable on the entire purchase price. It also provides relief for first-time buyers. In April 2016, an Additional Dwelling Supplement (ADS) was included at 4%. This rate is for additional dwellings, such as second homes or buy-to-let properties. The ADS rate increased to 6% in December 2022. No tax is due on additional dwellings with a purchase price of up to £40,000.
Stamp duty in Wales
Instead of SDLT, Land Transaction Tax (LTT) is charged in Wales. Similar in its concept, tax is paid according to thresholds rather than on the full property price. No extra relief is provided for first-time buyers. A further surcharge of 1% for additional properties on top of the original surcharge was introduced in December 2020. This increased charge for additional properties has been applied to all of the LTT thresholds.
Get expert answers to your stamp duty queries
If you’ve got any questions about your stamp duty liability, just give us a call on 01322 907 000. Our mortgage brokers are ready to help you with every aspect of your purchase, including your stamp duty calculations. If you prefer, send your stamp duty queries to us by email at info@trinityfinance.co.uk or via the contact form. One of our financial advisers will reply to you as quickly as possible with more information about stamp duty and how it may affect your purchase.
FAQs
Do any special rates apply for stamp duty?
Yes, different stamp duty rate calculations and rules apply in some circumstances. These include multiple transfers or purchases between a buyer and seller, residential property purchases by companies and trusts and when six or more residential properties are purchased in the same transaction. Shared ownership properties and corporate bodies are also subject to different stamp duty rate calculations and rules.
Do you have to pay stamp duty if the ownership of property or land is transferred to you?
If the ownership of property or land is transferred to you in exchange for a chargeable consideration, you may have to pay stamp duty. This depends on the circumstances that the transfer is based on. For example, the property or land may have been left to you in a will or given to you as a gift. The transfer of ownership may be the result of a marriage, moving in with someone or a civil partnership. Alternatively, it may be the result of a separation, divorce or end of a civil partnership. Other circumstances include transfers of property or land that’s jointly owned as well as transfers from or to a company. Guidance on transfers has been provided by HMRC for these circumstances.
If you increase your share in a shared ownership property, do you have to pay more stamp duty?
You won’t be liable to pay any more stamp duty after your first payment until you own over an 80% share of the property. At this point, stamp duty will become payable on the transaction that took you over 80% and any further transactions you make.
Can you benefit from any stamp duty relief?
Relief on the stamp duty payable is available in some circumstances. Guidance on the relief available is provided by HMRC for the following:
- First-time buyers
- Right to Buy properties
- Compulsory purchases
- Multiple dwellings
- Registered social landlords
- Charities that purchase property for a charitable purpose
- Employers that purchase an employee’s house
- Building companies that purchase an individual’s home
- Companies that transfer property to a different company
- Property developers who provide amenities to communities
- Property investment funds, such as co-ownership authorised contractual schemes (CoACS) and property authorised investment funds (PAIFs)
- Crown employees
To claim relief, you need to complete a stamp duty return even if no tax is payable.