Stamp Duty is the tax charged by the government when you buy a home for more than £125,000.
If you’re buying a home that costs over £125,000, you have to pay Stamp Duty Land Tax on the property, except in Scotland where stamp duty no longer applies. Instead you’ll now pay Land and Buildings Transaction Tax when you buy a property.
This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
A reform of residential property Stamp Duty announced by the chancellor in his 2014 Autumn Statement means that rates will now only apply to that part of the property price that falls within each band.
How much is Stamp Duty?
You pay 0% for the first £125,000, 2% on the portion up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on anything above that.
|Minimum property purchase price||Maximum property purchase price||Stamp Duty rate (only applies only to that part of the property price that falls within each band)|
|Over £1.5 million||12%|
For example, if your new home costs £175,000 you’ll pay £1,000 (2% of the property value that falls within the relevant band).