Everything you Need to Know About Stamp Duty

20th February 2015 posted in Property News

Everything you Need to Know About Stamp Duty

Unfortunately, a lot of things in life get taxed, and houses have always been a big focus for politicians. If you buy a house, then the likelihood is that you will have to pay a large amount of tax on top of the actual price of the property and the other costs that come with it.

Property tax is officially known as “Stamp Duty”. Once buyers purchase a house, they then have to pay a set amount of stamp duty to HMRC within 30 days of the sale. But what do you actually need to know about this tax?


Stamp Duty Land Tax is charged on any residential property purchased that costs over £125,000. It is imposed on houses, apartments and some leases – anything deemed to be residential.

Up until December 2014, Stamp Duty was a flat value that applied to the entire property price. It has now changed so that different bands apply across the whole price of the property.

The new bands are as follows:

  • 0% on the first £125,000
  • 2% on the next £125,000
  • 5% on the next £675,000
  • 10% on the next £575,000
  • 12% on the remainder (anything above £1.5 million.)

This means, for example, if you are buying a house that costs £200,000 you won’t have to pay any tax on the first £125,000, but you then have to pay 2% stamp duty on the remaining £50,000.

If you bought a house for £300,000 though, you would pay 5% on £150,000 of it, as it would fall into the band above. This continues until you buy a property worth £1.5 million or more, as the highest tax band is 10%.

If you are not sure what the total stamp duty you would need to pay on a property you are interested in is, then check out the Stamp Duty Calculator on the HMRC site.


As of April 2015, buyers in Scotland won’t pay Stamp Duty, but they will have to pay a Land and Buildings Transaction Tax. It has a similar band structure, in that the tax amount charged changes as the property value increases:

  • 0% on the first £145,000
  • 2% on the next £105,000
  • 5% on the next £75,000
  • 10% on the next £125,000
  • 12% on anything over £750,000.

The highest tax band of the Land and Buildings Transaction Tax comes in at a much lower price than it does with Stamp Duty, so if you are well off and looking to buy an expensive property then you are better off looking in England and Wales.

When’s Stamp Duty not Payable?

If you don’t pay more than £125,000 for your house, then you won’t have to pay any stamp tax, but there are a few other circumstances in which you don’t have to pay it as well.

If you are separating from your spouse, you don’t have to pay any stamp duty if you buy a portion of your house from them. You also don’t have to pay stamp duty if the deeds of a house are transferred over to you.

If you exchange properties with someone, then you will have to pay stamp duty, depending on the current market value of the houses. To find out more about Stamp Duty just visit the HMRC website.