Here’s everything you need to know about stamp duty.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is the tax that must be paid when you purchase a property or a piece of land. The amount of money required for stamp duty depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a First Time Buyer.
How much will you pay?
If the property is worth between £125,001 and £250,000, the stamp duty land tax rate is 2%. So if the property was valued at £250,000, you have to pay an extra £2,500 in stamp duty tax.
For the next £675,000, the rate is 5%. If the property you are purchasing was valued between £250,001 and £925,000 bracket, the buyer will not pay any stamp duty on the first £125,000 but will pay a 2% rate on the next £125,000 and a 5% rate on the following £675,000.
First-time buyers in England and Northern Ireland are required to pay stamp duty. However, it does not apply to the first £300,000 of a main residential property if it costs less than £500,000.
In Wales, they are exempt from land transaction tax on the initial £180,000 of their home. In Scotland, they don’t have to pay land and buildings transaction tax on the first £175,000 of the sale.