How do I work out my Stamp Duty?

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Find out how much Stamp Duty you'll have to pay on your new home

If you’re buying a new home, you’re getting familiar with the many costs involved in the process. But there’s one oft-overlooked element you need to build into your budget: Stamp Duty.

Stamp Duty Land Tax, to give the tax its full moniker, applies to homes costing more than £125,000. Like many HMRC initiatives, applying that cost isn’t straightforward.

If the cost of your home spans several tax brackets, you apply different rates to each. The more brackets through which the cost your home passes, the greater the number of rates you apply.

Before we explain how to work out Stamp Duty, we can offer you a shortcut. Our calculator uses the current rates; all you have to do is enter the full cost of your new home and hit ‘calculate’:

Calculate your stamp duty

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How to work out Residential Stamp Duty Land Tax longhand

The percentage of Stamp Duty you pay on a new home increases at scale. You can see the ‘brackets’ at which you add the tax to the cost of your home in this table:

Property ValueSDLT %
<= £125,0000%
>£125,000 but <£250,0002%
>£250,000 but <£925,0005%
>£925,000 but <£1.5M10%
>£1.5M12%

Viewing that table on its own can be misleading. For example, if you bought your home for £950,000, you wouldn’t apply a straight 5%. Rather, you’d apply the tax at the scale the table indicates:

  • for the first £125,000, you’d pay zero Stamp Duty;
  • the portion between £125,001-£250,000, you’d pay 2% (on £125,000 = £2,500);
  • the portion between £250,001-£925,000, you’d pay 5% (on £675,000 = £33, 750);
  • between £925,000-£1.5M, you’d pay 10% (balance £25,000 = £2,500);
  • giving a total of £38,750 Stamp Duty on a home costing £950,000 at current rates.

The vast majority of homeowners have to pay Stamp Duty. It doesn’t matter whether you’re a first-time buyer (including Help-to-Buy) or a homeowner. You pay the tax at the rate in the table above.

In most instances, your solicitor or conveyancer will make the payment for you. They’ll include it in their fee once you engage them in your service.

Exemptions

But there are a couple of notable exceptions. The first is obvious. If you buy your home for less than £125,000, you pay no Stamp Duty.

If you’re remortgaging you don’t pay either. That’s unless you’re changing the title deed to a new name, then you will be liable for the tax.

The full list of exceptions is on HMRC’s Stamp Duty Relief and Exemptions web page.

Summary

There are so many advantages for putting down a big deposit; it can flummox your focus. Don’t let that happen. You must budget for Stamp Duty, even if your solicitor is adding it to their fees.

You must pay SDLT within 30 days of completion. But as a rule, your solicitor will pay the tax for you (within their fee) on the day of completion.

SDLT is only a small part of the home buying equation, but our Stamp Duty calculator can:

  • help you budget for buying your home;
  • act as a double-check to ensure you’re happy with your solicitor’s fee.

Once you’ve catered for that, you can focus on the rest of your mortgage quest. Happy house hunting!

Call 0208 421 7545 or Request a Call Back available 8:30am – 6:30pm
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