RWinvest Stamp Duty Calculator and Guide to Stamp Duty for Investors

Amy Jackson
Amy Jackson
Property Editor
Updated 18 January, 2022
5 Min Read

RWinvest Stamp Duty Calculator and Guide RWinvest Stamp Duty Calculator and Guide

If you’re new to property investment, calculating stamp duty may not be something you’re familiar with. 

Like many other property-related terms, stamp duty tax is something that a beginner investor may not know much about. Even those buying a property for non-investment purposes can often be left asking – what is stamp duty on property? 

If you’re new to the world of property investment, you may not know how to calculate stamp duty or understand how to work out stamp duty costs on an investment property. 

However, understanding stamp duty on buy to let property is a crucial tip when getting started in property investment. 

If you’re asking ‘how much stamp duty will I pay?’ depending on the value of the property, or you want to learn more about additional stamp duty tax rates for buy to let investors, this is the guide for you. 

In this detailed guide to stamp duty, we bring you information on stamp duty for investors, along with tips on how to work out stamp duty on an investment property either by checking our stamp duty table containing current rates, or by using our stamp duty calculator. 

If you’re interested in learning more, scroll through this article to become an expert on all things stamp duty tax for 2022. 

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Contents

What Is Stamp Duty on Property and Who Pays It?
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What Is Stamp Duty on Property and Who Pays It?


How Much Stamp Duty Do I Need to Pay?
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How Much Stamp Duty Do I Need to Pay?



When Do I Pay Stamp Duty Tax and How Do I Do It?
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When Do I Pay Stamp Duty Tax
and How Do I Do It?



What Is Stamp Duty and Who Pays It?

Stamp duty, also known as stamp duty land tax (SDLT), is a tax that those in England or Northern Ireland are liable to pay when purchasing property for residential or investment purposes. In Scotland and Wales, stamp duty is known as land and buildings transaction tax and land transaction tax. 

Stamp duty tax is payable by anyone buying a property, but the cost of stamp duty tax is dependent on the purchase price of the property and the type of purchase that’s being made.  

If you’re a first-time buyer, for instance, you’ll only pay stamp duty tax on properties worth over a certain amount. 

The tax applies to both freehold and leasehold properties, whether or not you’re using a mortgage to pay for the property. 

In Scotland, the equivalent of stamp duty tax is referred to as ‘land and buildings transaction tax’ (LBTT). 

While land and buildings transaction tax and stamp duty tax may have different names, they have similar functions. 

Both SDLT and LBTT are payable on properties worth over a set amount. The main difference between these two types of tax is the thresholds that dictate the percentage of tax that is paid. 

In Wales, stamp duty tax is referred to as ‘land transaction tax’, also known as LTT. Again, land transaction tax is similar to stamp duty land tax but comes with different tax thresholds set out by the Welsh government. 

Yes, stamp duty land tax needs to be paid even if you’re an overseas investor. In fact, stamp duty fees have been different for overseas investors since April 2021, when non-UK residents buying a UK investment property are required to pay a 2% surcharge on top of existing stamp duty prices. 

There are certain circumstances in which stamp duty fees can be avoided. 

If you’re a first-time buyer buying property worth less than £300,000, you won’t be required to pay any stamp duty tax. This applies to stamp duty for buy to let purchases as long as you don’t already own a home of your own, making your buy to let investment the first property purchase you make. 

Buy to live purchases also don’t incur stamp duty fees on the first £125,000 of a property. Therefore, people who are selling their existing home and buying a new one with a value of less than £125,000 will not need to pay stamp duty tax.  

Certain property types such as houseboats, mobile homes, and caravans are also exempt from stamp duty tax. 

First-time buyers have a lot more leeway in avoiding stamp duty costs. First-time buyers do not need to pay stamp duty prices on a property with a value of less than £300,000. 

Therefore, the majority of first-time buyers will not need to pay the added cost of stamp duty taxes. 

If you’re interested in investing in buy to let property but don’t already own a property of your own, you meet the criteria of a first-time buyer. 

Paying stamp duty as a buy to let first-time buyer will apply to properties worth £300,000 or over. 

While it is rare for investors to not already own a main residence of their own, this may apply to you if you’re living with family or renting a home while you invest. 

The stamp duty holiday was a tax break that was enforced in July 2020. Originally set to last until March 2021, the stamp duty holiday was extended and officially ended in October 2021. 

For property purchases made before 30th June 2021, tax savings on properties worth less than £500,000 were available to those in England and Northern Ireland. 

Then, on purchases made before 30th September, stamp duty holiday savings could be made on properties worth less than £250,000. 

This stamp duty tax break allowed those buying property during this period to benefit from significant tax savings on stamp duty costs. 

This applied to stamp duty on investment property purchases and residential purchases from those buying a home to live in. 

What Is Stamp Duty When Buying a House?

Stamp duty, also known as stamp duty land tax (SDLT), is a tax that those in England or Northern Ireland are liable to pay when purchasing property for residential or investment purposes. In Scotland and Wales, stamp duty is known as land and buildings transaction tax and land transaction tax. 

Stamp duty tax is payable by anyone buying a property, but the cost of stamp duty tax is dependent on the purchase price of the property and the type of purchase that’s being made.  

If you’re a first-time buyer, for instance, you’ll only pay stamp duty tax on properties worth over a certain amount. 

The tax applies to both freehold and leasehold properties, whether or not you’re using a mortgage to pay for the property. 

What Is Stamp Duty in Scotland and Wales?

In Scotland, the equivalent of stamp duty tax is referred to as ‘land and buildings transaction tax’ (LBTT). 

While land and buildings transaction tax and stamp duty tax may have different names, they have similar functions. 

Both SDLT and LBTT are payable on properties worth over a set amount. The main difference between these two types of tax is the thresholds that dictate the percentage of tax that is paid. 

In Wales, stamp duty tax is referred to as ‘land transaction tax’, also known as LTT. Again, land transaction tax is similar to stamp duty land tax but comes with different tax thresholds set out by the Welsh government. 

Do I Need to Pay Stamp Duty Tax as an Overseas Investor?

Yes, stamp duty land tax needs to be paid even if you’re an overseas investor. In fact, stamp duty fees have been different for overseas investors since April 2021, when non-UK residents buying a UK investment property are required to pay a 2% surcharge on top of existing stamp duty prices. 

Can Stamp Duty Be Avoided? Are There Any Exemptions?

There are certain circumstances in which stamp duty fees can be avoided. 

If you’re a first-time buyer buying property worth less than £300,000, you won’t be required to pay any stamp duty tax. This applies to stamp duty for buy to let purchases as long as you don’t already own a home of your own, making your buy to let investment the first property purchase you make. 

Buy to live purchases also don’t incur stamp duty fees on the first £125,000 of a property. Therefore, people who are selling their existing home and buying a new one with a value of less than £125,000 will not need to pay stamp duty tax.  

Certain property types such as houseboats, mobile homes, and caravans are also exempt from stamp duty tax. 

Do First Time Buyers Need to Pay Stamp Duty Tax?

First-time buyers have a lot more leeway in avoiding stamp duty costs. First-time buyers do not need to pay stamp duty prices on a property with a value of less than £300,000. 

Therefore, the majority of first-time buyers will not need to pay the added cost of stamp duty taxes. 

What About Stamp Duty for a Buy to Let First Time Buyer?

If you’re interested in investing in buy to let property but don’t already own a property of your own, you meet the criteria of a first-time buyer. 

Paying stamp duty as a buy to let first-time buyer will apply to properties worth £300,000 or over. 

While it is rare for investors to not already own a main residence of their own, this may apply to you if you’re living with family or renting a home while you invest. 

What Was the Stamp Duty Tax Holiday?

The stamp duty holiday was a tax break that was enforced in July 2020. Originally set to last until March 2021, the stamp duty holiday was extended and officially ended in October 2021. 

For property purchases made before 30th June 2021, tax savings on properties worth less than £500,000 were available to those in England and Northern Ireland. 

Then, on purchases made before 30th September, stamp duty holiday savings could be made on properties worth less than £250,000. 

This stamp duty tax break allowed those buying property during this period to benefit from significant tax savings on stamp duty costs. 

This applied to stamp duty on investment property purchases and residential purchases from those buying a home to live in. 

How Much Stamp Duty Do I Need to Pay? How Much Stamp Duty Do I Need to Pay?

How Much Stamp Duty Do I Need to Pay? 

What percentage is stamp duty tax for buy to live properties vs buy to let? And how much is the stamp duty tax for first-time buyers?  

This section offers information on how to calculate stamp duty tax with our helpful stamp duty calculator for 2022. 

How to Calculate Stamp Duty 

Stamp Duty can be calculated in two ways. You can either use a stamp duty calculator like the one below or follow a stamp duty formula and check a stamp duty table to calculate the costs yourself. 

If you’re interested in using a stamp duty calculator to calculate your stamp duty fees quickly, our buy to live and buy to let stamp duty calculators below can help you with calculating stamp duty more easily and effectively. 

Simply enter the value of the property you’re looking to buy, and select the type of purchase you’re making, and you can get a quick and simple answer to ‘how much is stamp duty in the UK?’ with our stamp duty calculator for buy to let and residential purchases. 

All you need to do is enter your property price, and we’ll generate your stamp duty prices for you. 

Stamp Duty Calculator

Stamp Duty due:
Effective Rate: 1%

See Full Calculation below:

Tax Brand % Taxable Sum Tax
less than £125k 0
£125k to £250k 2 £125,000 £2,500
£250k to £925k 5 £0 £0
£925k to £1.5m 10 £0 £0
rest over £1.5m 12 £0 £0
Stamp Duty due: £0
Effective Rate: 0%

See Full Calculation below:

Tax Brand % Taxable Sum Tax
less than £125k 3% £0 £0
£125k to £250k 5% £125,000 £2,500
£250k to £925k 8% £0 £0
£925k to £1.5m 13% £0 £0
rest over £1.5m 15% £0 £0
Stamp Duty due: £0
Effective Rate: 0%

See Full Calculation below:

Tax Brand % Taxable Sum Tax
less than £300k 0 £0 £0
£300k to £500k 5 £0 £0
£500k to £925k 8 £0 £0
£925k to £1.5m 13 £0 £0
rest over £1.5m 15 £0 £0

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How to Work Out Stamp Duty  

If you’re asking what are the stamp duty thresholds in England and Northern Ireland, Wales, and Scotland, and wondering how much stamp duty do I need to pay as a buy to let investor, this section will help you. 

Keep reading for information on the different thresholds for stamp duty in the UK, with helpful tables displaying current stamp duty rates. 

How to Work Out Stamp Duty in England and Northern Ireland 

If you want to know how to work out stamp duty tax on purchases in accordance with the current rates, the below table of stamp duty prices will help you. 

Here is a guideline to the amount of percentage of stamp duty for investors and those buying a primary residence in England and Northern Ireland in 2022.  

Stamp Duty Rates (England & Northern Ireland)

What Is the Stamp Duty Threshold? 

The threshold for paying stamp duty on investment property purchases or buy to live second home purchases differs. 

For buy to live, the threshold for paying stamp duty is £125,000 for non-first-time buyers, after which amount buyers will be required to pay a stamp duty fee. 

For buy to let, the threshold is £40,000, with the percentage of stamp duty owed increasing as the property price rises. 

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How to Work Out Stamp Duty in Scotland and Wales How to Work Out Stamp Duty in Scotland and Wales

How to Work Out Stamp Duty in Scotland and Wales 

So we know about stamp duty costs in England and Northern Ireland, but how much is stamp duty in the UK countries Wales and Scotland? 

Stamp duty taxes work a little differently in Scotland and Wales compared to England. In Scotland, stamp duty tax is referred to as land and buildings transaction tax (LLBT), and in Wales, stamp duty taxes are land transaction tax (LTT).  

Here, you can see the rates for the cost of stamp duty in Scotland. This table shows how much stamp duty you will pay on property purchases made in Scotland for land and buildings transaction tax. 

Land & Building Transaction Tax Rates (Scotland) UK Cities Average Rental Income & Yields

 

In this table, you can see the land transaction tax thresholds for those buying property in Wales. 

For a quick way to work out the cost of stamp duty in Wales, check out the Wales stamp duty calculator from the Welsh government website. 

Land Transaction Tax Rates (Wales) Land Transaction Tax Rates (Wales)

When Do I Pay Stamp Duty and How Do I Do It? 

When Do You Start Paying Stamp Duty?  

So, when should you pay stamp duty tax? After you’ve purchased a property, your stamp duty payment will start immediately. You are required to pay your stamp duty fees within 14 days of buying a property. 

Use our buy to let and residential stamp duty calculator to work out how much this will be in advance to ensure you have the correct amount available. 

How Do I Pay Stamp Duty Costs UK? 

Paying Stamp Duty is easy when you have the know-how. A stamp duty land tax return should be sent to HMRC and paid within 14 days of completion of the property. 

Completion is when all contracts have been signed off, and you get your keys to enter the property. If you don’t pay within this time frame, you could be subject to interest rates or fines.  

When using solicitors, conveyancers, or agents to assist in property transactions, they may file an SDLT return to HMRC themselves and pay the stamp duty prices upon completion on the property on the buyer’s behalf. 

The tax would then be added to the solicitor fees to be paid by the buyer. 

What if I Cannot Cover Stamp Duty Costs? 

If you’re worried that you can’t cover the cost of stamp duty, it’s possible to borrow more money when you take out your mortgage. This way, you can use a loan to pay stamp duty tax’s substantial rates. 

However, the downside of doing this is that after a long repayment period, the initial price of stamp duty will accumulate interest and cost you more money in the long run. 

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We hope you’ve found our guide to stamp duty on investment property purchases useful and have utilised our stamp duty buy to let calculator to work out how much you need to pay in stamp duty prices. 

If you have any further questions about how the buy to let stamp duty rates apply to our investment opportunities, or you’ve used our stamp duty calculator on a BTL investment listed on our website and want to find out more, please don’t hesitate to get in touch. 

We can offer any necessary guidance and help you move forward with your buy to let investment. 

If you need further information on laws for stamp duty for investors, or you have more questions on topics such as ‘when do you start paying stamp duty?’, it’s worth seeking the help of a financial adviser who can offer you some detailed advice. 

Alternatively, if you want to widen your knowledge on all things property, then be sure to check out our free in-depth guides! 

Here, you can learn in detail about top UK areas to help you decide on the best place to buy property to start your investment.  

You can also learn more about the latest stamp duty facts in our guide to stamp duty on buy to let property. 

Disclaimer: The information used in our guide to stamp duty on investment property purchases adheres with the current stamp duty rates as displayed on reputable financial websites and official online sources. 

Our guide to stamp duty for buy to let investors is offered for informational purposes and should not be taken as financial advice. Seek the help of a financial advisor if you’re unsure of the potential taxes you may need to pay. 

This stamp duty guide was last updated in January 2022.  

Amy Jackson
Amy Jackson
Property Editor

Amy Jackson is the property editor at RWinvest. Amy has over three years of experience working in the property content sector and has a keen eye for finding the latest news, statistics, and must-have property investment information.

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