Stamp Duty Calculator

What is Stamp Duty?

Stamp Duty Land Tax or SDLT dates back to the end of the 17th century and is a tax charged on property purchased in England and Northern Ireland.

This tax is owed when:

• Buying a freehold property
• Purchasing a leasehold / share of freehold property (typically a flat)
• Buying a property through a shared ownership scheme
• Any kind of property transfer in exchange for payment – such as taking on a mortgage or acquiring an agreed share in a property asset (but not remortgaging)

Note that Wales has its own form of stamp duty called the Land Transaction Tax (LTT). Scottish residential property buyers also pay the Land and Buildings Transaction Tax (LBTT). There are also different stamp duty rates for commercial property purchases and for those that are non-UK residents.

Stamp duty charges vary according to the purchase price of the property. There is a series of tax bands with rising rates – meaning that the lower the buy price, the lower the tax will be.

Since late 2014, the calculation changed from being a “slab tax” – where each price bracket had its own associated applicable percentage charge – to an “incremental” structure.  This essentially means that the stamp duty is effectively split out as the purchase price point increases above each threshold.

Stamp duty land tax regimes can be changed by the Chancellor of the Exchequer as part of budget announcements.  In 2017, for example, Philip Hammond introduced first-time buyer stamp duty relief.

This can occur in a “mini” form, such as in September 2022, where the former (and temporary) Chancellor Kwasi Kwarteng announced such changes to the thresholds. These remained when current Chancellor Jeremy Hunt took over leadership of the Exchequer.

There are also “emergency” budgets – where more radical decisions regarding stamp duty are made.  The most recent example was during the COVID pandemic where property buyers under certain thresholds did not have to pay any SDLT under what was named the “stamp duty holiday”.

Latest Reforms to Stamp Duty

Aimed at boosting the house sales market, SDLT rates were revised on 23rd September 2022, as shown in the table below:

Despite criticism of misplaced priorities, the stamp duty updates benefit home buyers in the following ways:

• Stamp duty will not be charged on the first £250,000 of the property’s sale price. This doubles the previous threshold (from £125,000);
• First-time buyers do not need to pay stamp duty on the first £425,000 of the property price. However, this must not be less than £625,000. Prior to this, the relief was set at £300,000 on properties sold for less than £500,000;
• Second / additional property buyers will also benefit from the rising buildings transaction tax thresholds – although will still have to the 3% surcharge to pay (see below);
• Second / additional property purchases for under £40,000 will not incur a stamp duty charge;

When is Stamp Duty Paid?

To boost efficiencies in the tax collection system, since March 2019, stamp duty payment was required within 14 days after completion day. This was reduced from 30 days previously.

In most cases, the buyer will transfer the funds during the latter part of the conveyancing process (typically between exchange of contracts and completion).

The solicitor / conveyancer will submit an stamp duty return to HM Revenue and Customs on behalf of the buyer in good time.

Higher Stamp Duty Rates for Additional Properties

Since April 2016, property buyers acquiring second properties such as buy-to-let investments or holiday homes are required to pay a 3% stamp duty surcharge on the purchase price (i.e. on top of the existing rate).

The stamp duty calculator above shows how much of the surcharge will be owed depending on the property price threshold.

Why did the government choose to charge this extra level of stamp duty?

With housebuilding volumes still lagging, it’s arguable that the government’s aim was to discourage second home buying.

Helping first time buyers by charging a standard level of tax is aimed at creating more of a level playing field.

What if am replacing my main residence (but will own 2 properties temporarily)?

If you have not sold the property that is your main residence on the day you complete on the purchase of another property, you will still have to pay stamp duty.

However, you can apply for a refund if you sell your property that was your main home within 36 months. Note that you should not let the property as that could affect your ability to get the refund.

What if I go over the 36 month minimum for owning 2 properties?

It may be possible to get a refund of the 3% surcharge provided that you can prove that there were exceptional circumstances that prevented you from selling.

You will need to get in touch with the HMRC to provide your full details alongside:

• Information on the main buyer of the property;
• A full explanation of why you were unable to sell (such as illness, death in the immediate family or bereavement);
• Information on the property where higher stamp duty was paid – including the unique transaction reference number (the solicitor the handled the sale can provide this);
• Information on the previous main residence;
• How much stamp duty at additional rates were paid and the amount of refund you are requesting;
• Your bank details.

Stamp Duty Tax if Your Are Not Resident in the UK

Property buyers that are outside of the UK for 183 days or more during 12 months before the purchase are not deemed to be a resident of the country.

In these scenarios, there will typically be a 2% surcharge on the property’s purchase price – bar the following circumstances:

If you are married or in a civil partnership, and one of you is a UK resident whilst the other is abroad, then both partners get the same tax treatment. Note you will have to be buying the property together.

Special Stamp Duty Rates

It’s worth noting the different rules and rate calculations that apply.

Corporate Bodies

Companies, partnerships and collective investment schemes pay stamp duty at 15%.

The purchase will be exempt from this charge if the property is bought under the following conditions:

• As a property rental and/or for development purposes
• As a publically available property
• By financial institutions buying property for lending purposes
• For farming use
• As part of a qualified housing cooperative

Commercial and Mixed Use Properties

Non-residential or mixed-use properties are subject to incremental stamp duty proportions when the sales value is £150,000 and over.

Freehold Sales and Transfers

Stamp duty will also be charged on lease premiums and transfers as shown in the table below:

Non Residential / Mixed Leasehold Property Sales and Transfers

When purchasing a non-residential property or one with both commercial and residential elements, how much stamp duty owed is based on:

• The purchase price of the lease, also known as the “lease premium”;
• The total value of the annual rent over the lifetime of the lease, referred to as the “net present value” (NPV). As shown in the table below, no stamp duty is due if the NPV is under £150,000.

Shared Ownership Homes

Properties purchased through an approved public body (such as a shared ownership scheme, housing association or local housing authority) stamp duty will still be owed.

Note that:

• If you’re purchasing a share of the property, you will only have to pay stamp duty on that amount (not the full price);
• If you decide to purchase a greater share in the future, extra stamp duty will only be owed if you exceed 80%;
• It’s possible to pay the SDLT in stages.

Multiple Purchases or Transfers

A “linked” purchase is one where 2 or more property transactions (such as a portfolio sale) involve the same buyer and seller.

The buyer pays SDLT on the gross value of the linked transactions. This could result in paying a higher rate of tax compared to buying the properties individually.

Companies and Trusts Residential Property Purchases

There are specific rules that govern the amount of stamp duty payable on specific company and trust-related property sales.

Beware of Stamp Duty Tax Scams

It’s worth being aware of the scams out there.

HM Revenue and Customs have, for example, warned against so-called “tax repayment agents”. The ploy involves contacting recent homebuyers and promising rebates on overpaid stamp duty in return for a fee.

If you receive such a call, email or text message, be sure to contact your conveyancer who can verify the details. Although such scenarios rarely occur, it’s often a case of dealing with HMRC directly who will not charge any fees.