Stamp Duty Calculator
The UK Government’s Chancellor Rishi Sunak has announced homebuyers will not have to pay stamp duty on homes up to £500,000, until 31 March 2021 in England and Northern Ireland.
Those buying a property under the £500,000 threshold will now pay nothing in stamp duty. We have updated our calculator below to give you the correct information on how much stamp duty you need to pay now.
How much stamp duty will you have to pay when buying a residential property?
The following calculator and commentary is for general interest only and must not be relied on. It may not be up to date or complete, relates only to certain types of residential property in England or Wales and does not constitute advice. We can often help you to find suitable independent advisers, but you will always need to take specific advice from your property lawyers, accountants or other financial advisers on tax issues in specific situations.
Stamp Duty – all you need to know
Table of content:
- Stamp Duty Tax Calculator
- When is Stamp Duty paid?
- What were the major changes to UK Stamp Duty?
- Stamp Duty Tax Rates
- How to calculate the new Stamp Duty rate
- Buy-to-let and second homes Stamp Duty 2018
- Buy-to-let and second home Stamp Duty tax bands
- Can I reduce Stamp Duty?
- Who pays Stamp Duty?
- Mortgage providers
When is Stamp Duty paid?
When buying a property over a certain price, stamp duty is payable to the HMRC 14 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don’t miss the deadline. Some buyers prefer to add on the SDLT amount to their mortgage loan. Please speak to your mortgage provider.
What were the major changes to UK Stamp Duty?
Stamp Duty Land Tax (SDLT) is a progressive tax paid when purchasing a freehold, leasehold or shared ownership residential property over £125,000 in England, Northern Ireland and Wales (separate Land and Buildings Transaction Tax in Scotland). New SDLT rates were introduced in 2014’s Autumn Statement, introducing a sliding system based on thresholds and dependent on a property price.
Different SDLT rates and thresholds apply to non-residential property or mixed use land.
Before 2014 a ‘slab structure’ was in place with buyers paying a rate based on the ENTIRE property purchase price. The new rates are now payable only on the PORTION of a property price which falls within each band. As with every tax, there are those who will be better and worse off compared to the previous system.
Stamp Duty Tax Rates as of December 2014 for residential properties purchased by individuals
How to calculate the new Stamp Duty rate
So, if you bought a property for £850,000 you would you pay no stamp duty on the first £125,000, then 2% on £125,000 to £250,000 and 5% above £250,000. (eg: £800,000 – £250,000 = £600,000 x 0.05 = £30,000 + £2,500 = £32,500).
As the property price increases the rate of pay increases within a certain tax bracket with percentages rising when a higher price threshold is reached. Under the new SDLT property over £925,000 – £1.5m will be taxed at a rate of 10% compared with 5% in 2014.
Buy-to-let and second homes Stamp Duty 2018
From April 2016, property buyers in England and Wales will have to pay an additional 3% on each stamp duty band. To discuss which London or UK areas will provide the highest returns on investments in 2018, 2019 and beyond, please speak to one of our London or regional property experts who can offer advice on where and when to invest.
Buy-to-let and second home Stamp Duty tax bands
Brackets | Standard rate | Buy-to-let/second home rate (April 2016) |
Up to £125k | 0% | 3% |
£125k – £250k | 2% | 5% |
£250k – £925k | 5% | 8% |
£925k – £1.5m | 10% | 13% |
£1.5mill+ | 12% | 15% |
Can I reduce Stamp Duty?
As stamp duty is only payable on the land purchase, removable fixtures and fittings, or chattels, such as freestanding wardrobes, sofas, fridges, carpets and curtains, are not subject to SDLT and can, therefore, be subtracted from from the total property price. Everything ‘attached’ to property such as light switches technically form part of the property and are subject to SDLT.
If a seller is willing to leave certain chattels, you should agree to pay a reasonable amount between yourself and the vendor and subtract it from the agreed purchase price. This can be executed by a good tax lawyer or conveyancer.
Who pays Stamp Duty?
Stamp Duty is paid by everyone purchasing a residential or non-residential property in England, Northern Ireland and Wales, including overseas buyers, corporate bodies and non natural persons.
Mortgage providers
We offer a large range of services for buyers and tenants; free valuations for sellers and landlords; and in-house property consultants who can advise on a range of products such as mortgages, insurances, pensions, low-cost conveyancing.Feel free to call us on 0121 544 9595 and enquire about having a chat with one of our in-branch mortgage advisors. Love Your Postcode know that when it comes to buying a property for the first time, it is important to find an estate agent who has extensive knowledge, understands the property market and can find you the best homes for the best prices.
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