Understanding Stamp Duty

Depending on the value of your new home you may have to pay a government tax called Stamp Duty. Stamp Duty is a government charged tax and is applicable in England and Wales for homes that cost more than £125,000. Scotland also has a government tax, yet it is now referred to as the Land and Buildings Transaction Tax (LBTT), which comes into force when your new home costs more than £145,000.

Stamp Duty is collected to reflect the work that goes into changing the land ownership of your property from the develop / previous property owner, to you. All land needs to be legally registered with the Land Registry. To complete the Land registry process it requires a certificate from the HMRC, which is what the fee from the Stamp Duty pays for. This is a piece of background work that is completed by your solicitor as part of your house purchase and something you do not have to initiate yourself.

How much is Stamp Duty?

In England and Wales, Stamp Duty rates increase on a sliding scale based on the price of the property being purchased.

Purchase Price Stamp Duty Rates
Up to £125,000 0%
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
More than £1.5 million 12%

 

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