Stamp Duty is a tax that those in England or Northern Ireland are liable to pay after purchasing a residential property or piece of land, or a second home such as a buy to let investment property. The tax applies to both freehold and leasehold properties, whether or not you’re using a mortgage to pay for the property.
You only have to pay Stamp Duty when buying a property over a certain amount, and the higher the cost of the property, the more Stamp Duty you’ll have to pay. In Scotland and Wales, Stamp Duty tax laws don’t apply. Instead of Stamp Duty, Scotland has its own distinct Land and Buildings Transaction Tax with different rates, and Wales also uses a differently tiered system, so be sure to look into this further if purchasing property within these regions.
There are some reasons why you might not need to pay Stamp Duty tax. First-time buyers, for instance, are exempt from paying Stamp Duty on properties worth less than £300,000. If you’re a buy to let investor who owns their own home, you can avoid Stamp Duty tax on purchases worth less than £40,000. Certain types of properties such as houseboats, mobile homes and caravans are also exempt from Stamp Duty.
The threshold for Stamp Duty tax is £125,000 on residential properties or land purchases. For those buying a second home, however, the threshold is lowered to £40,000. This means that if you’re investing in a buy to let property, you will most likely be required to pay Stamp Duty as most investment properties are priced higher than £40,000.
So how much is Stamp Duty in the UK? The amount of Stamp Duty that you will pay depends on the purchase price of the property. For instance, for a buy to let property worth £130,000, you would need to pay Stamp Duty of 3.08% which would equal £4,000. As a rule of thumb, use this helpful Stamp Duty table below to understand the amount of Stamp Duty you may need to pay.
The number of properties you own impacts the rate of Stamp Duty paid on your buy to let investment. For instance, if you’re wondering how much Stamp Duty on a 250k property that you’ll need to pay, the answer would be £10,000. If you bought two properties worth the same amount, you would pay £20,000 in total on Stamp Duty tax.
Stamp Duty can be calculated in two ways. You can follow the above guide to find out what percentage of Stamp Duty you’ll need to pay based on your property price and calculate the amount yourself, or you can use a Stamp Duty calculator for BTL or residential properties. With our buy to live and buy to let Stamp Duty calculator, all you need to do is enter your property price, and we will calculate Stamp Duty for you.
After you’ve purchased a property, your Stamp Duty payment will start immediately. You’re required to pay your Stamp Duty fees within 14 days of buying a property. Therefore, you should use our buy to let and residential Stamp Duty calculator to work out how much this is going to be in advance to ensure you have the correct amount available.
What is Stamp Duty?
Stamp Duty is a tax that those in England or Northern Ireland are liable to pay after purchasing a residential property or piece of land, or a second home such as a buy to let investment property. The tax applies to both freehold and leasehold properties, whether or not you’re using a mortgage to pay for the property.
You only have to pay Stamp Duty when buying a property over a certain amount, and the higher the cost of the property, the more Stamp Duty you’ll have to pay. In Scotland and Wales, Stamp Duty tax laws don’t apply. Instead of Stamp Duty, Scotland has its own distinct Land and Buildings Transaction Tax with different rates, and Wales also uses a differently tiered system, so be sure to look into this further if purchasing property within these regions.
Can Stamp Duty be Avoided?
There are some reasons why you might not need to pay Stamp Duty tax. First-time buyers, for instance, are exempt from paying Stamp Duty on properties worth less than £300,000. If you’re a buy to let investor who owns their own home, you can avoid Stamp Duty tax on purchases worth less than £40,000. Certain types of properties such as houseboats, mobile homes and caravans are also exempt from Stamp Duty.
What is the Stamp Duty Threshold?
The threshold for Stamp Duty tax is £125,000 on residential properties or land purchases. For those buying a second home, however, the threshold is lowered to £40,000. This means that if you’re investing in a buy to let property, you will most likely be required to pay Stamp Duty as most investment properties are priced higher than £40,000.
How Much is Stamp Duty - How Much Stamp Duty Do You Pay?
So how much is Stamp Duty in the UK? The amount of Stamp Duty that you will pay depends on the purchase price of the property. For instance, for a buy to let property worth £130,000, you would need to pay Stamp Duty of 3.08% which would equal £4,000. As a rule of thumb, use this helpful Stamp Duty table below to understand the amount of Stamp Duty you may need to pay.
The number of properties you own impacts the rate of Stamp Duty paid on your buy to let investment. For instance, if you’re wondering how much Stamp Duty on a 250k property that you’ll need to pay, the answer would be £10,000. If you bought two properties worth the same amount, you would pay £20,000 in total on Stamp Duty tax.
How to Calculate Stamp Duty - How is Stamp Duty Calculated?
Stamp Duty can be calculated in two ways. You can follow the above guide to find out what percentage of Stamp Duty you’ll need to pay based on your property price and calculate the amount yourself, or you can use a Stamp Duty calculator for BTL or residential properties. With our buy to live and buy to let Stamp Duty calculator, all you need to do is enter your property price, and we will calculate Stamp Duty for you.
When Does Stamp Duty Start?
After you’ve purchased a property, your Stamp Duty payment will start immediately. You’re required to pay your Stamp Duty fees within 14 days of buying a property. Therefore, you should use our buy to let and residential Stamp Duty calculator to work out how much this is going to be in advance to ensure you have the correct amount available.
