A Quick Guide to Stamp Duty

If you’re buying a home for the first time or you’re moving to your second home, some of the terminology might be a bit confusing. 

In this blog, we’re going to talk about what you should know about stamp duty, how the stamp duty charge is calculated and more.

What is stamp duty?

Stamp Duty, also known as Stamp Duty Tax, is an amount of money you have to pay if you buy a residential property or a piece of land in England or Northern Ireland.

How does stamp duty work?

Stamp Duty is only paid on residential properties worth more than £250,000 at the time of writing (November 2022). 

Unless you qualify for an exemption, which we’ll discuss further below. Stamp Duty is payable on both freehold and leasehold homes, and the amount is the same whether you have a mortgage or buy the house outright.

Those buying in Scotland must pay the Land and Buildings Transaction Tax, commonly known as LBTT. If you live in Wales, you must pay the Wales Land Transaction Tax (LTT).

How much is stamp duty?

Stamp Duty is calculated based on the cost of the property you are purchasing. Stamp Duty is divided into bands, and property prices will fall into one of them.

For example, on the first £250,000, you will pay no Stamp Duty Tax. If the value of your home is between £250,001 and £350,000, you will pay 5%, which is £5,000.

If you’re unsure, a Stamp Duty Land Tax calculator will help! Here are the bands against property values:

Property PriceStamp Duty Tax Percentage
Up to £250,0000% 
£250,001 – £925,0005%
£925,001 – £1.5 million10%
Anything above £1.5 million12%

If you’re buying another home alongside your first, you will have different Stamp Duty percentages based on property price. It applies to homes over £40,000. The rates are: 

Property PriceStamp Duty Tax Percentage
Up to £250,0003%
£250,001 – £925,0008%
£925,001 – £1.5 million13%
Anything above £1.5 million15%

Understanding stamp duty exemptions

Stamp Duty Tax exemptions are available in some instances. You do not have to pay Stamp Duty on a property worth up to £425,000 if you are a first-time buyer. 

If the value of your first home exceeds £625,000, you will not be required to pay Stamp Duty on the first £425,000. If the house is worth more than £625,000, you are not eligible for the exemption and must pay the standard rates, even if you are a first-time buyer.

If you have more questions about first time buyer Stamp Duty – get in touch today and we can help.

How do you pay stamp duty?

In most circumstances, your solicitor will handle Stamp Duty Tax and finish the payment on your behalf as part of your costs. You are accountable for this whether your solicitor submits it or you do it.

Final thoughts

Stamp Duty on property can be complicated, but we’re here to help. If you require any additional assistance with stamp duty rates, or if your property search has been halted due to stamp duty, please contact us today to see how we can support you.


  • Elliott Benson

    Meet Elliott, a seasoned mortgage broker with over nine years of experience in property, and the founder of Sett Mortgages. With a background as a sales negotiator and mortgage services manager, he is a trusted professional with extensive knowledge in all things mortgages. Elliott's empathetic approach and clear communication style make him an approachable expert, decoding the complexities of mortgages for clients from diverse backgrounds. He stays up-to-date with the latest trends and regulations, offering cutting-edge solutions tailored to clients' needs. Committed to their financial well-being, he guides them through the mortgage process, ensuring countless successful and satisfied clients. Elliott's passion extends beyond his practice; he's a prolific writer, sharing his knowledge and insights in industry publications and blogs. His mission is to empower others with the information they need to make sound financial decisions.

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