Stamp Duty Tax Vector Illustration

RWinvest Stamp Duty Calculator and Guide to Stamp Duty for Investors

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.

In July 2020, stamp duty tax made the UK headlines after Rishi Sunak announced a new temporary stamp duty tax holiday initially set to last until March 2021.

Now lasting until the end of June, the stamp duty holiday allows some fantastic savings on the cost of stamp duty for investors and those buying a second home.

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.

We also cover details on the new rates on stamp duty prices in-line with the stamp duty holiday announced in July 2020. If you’re interested in learning more, scroll through this article to become an expert on all things stamp duty tax for 2021.

Stamp Duty Holiday Calculator: How Much Stamp Duty Will I Pay Until June 2021?

Stamp Duty due: £0
Effective Rate: 0%

See Full Calculation below:

Tax Brand % Taxable Sum Tax
less than £500k 0% £0 £0
£500k 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 £500k 3% £250,000 £7500
£500k 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 £500k 0% £0 £0
£500k to £925k 5% £0 £0
£925k to £1.5m 10% £0 £0
rest over £1.5m 12% £0 £0

Contents

Stamp Duty Land Tax is a tax payable when purchasing property for residential or investment purposes Stamp Duty Land Tax is a tax payable when purchasing property for residential or investment purposes

What Is Stamp Duty and Who Pays It? 

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.

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

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.

Illustration of Scottish and Welsh flags Illustration of Scottish and Welsh flags

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 are different for overseas investors as of April 2021, when non-UK residents buying a UK investment property will be 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.

Put simply, if you’re buying a buy to live property, whether you’re a first-time buyer or simply purchasing a second home after selling your first, you’ll be exempt from paying stamp duty tax on property with a value of up to £500,000 until 30th June 2021.

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

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During the stamp duty holiday, first-time buyers can avoid stamp duty rates on properties worth up to £500,000 before 30th June 2021 During the stamp duty holiday, first-time buyers can avoid stamp duty rates on properties worth up to £500,000 before 30th June 2021

Do First Time Buyers Need to Pay Stamp Duty Tax? 

First-time buyers have a lot more leeway in avoiding stamp duty costs. Under normal circumstances, first-time buyers do not need to pay stamp duty prices on 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.

During the stamp duty holiday, first-time buyers can avoid paying residential stamp duty rates on properties worth up to £500,000 before 30th June 2021.

After July 1st, the stamp duty threshold reverts to £300,000.

As of October 1 2021, The Stamp Duty Holiday Has Now Ended. Learn About the Latest Stamp Duty Rates by Clicking the Link.

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.

This means that you won’t need to pay stamp duty tax on properties worth £500,000 or less from now until 30th June 2021.

Paying stamp duty as a buy to let first time buyer will then only 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.

Rishi Sunak Rishi Sunak

The Stamp Duty Tax Holiday 

What Is the Stamp Duty Holiday UK? 

The stamp duty holiday is a new tax break that was enforced in July 2020. Originally set to last until March 2021, the stamp duty holiday has now been extended.

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

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

This stamp duty tax break allows those buying property between now and June 2021 to benefit from significant tax savings on stamp duty costs, with tax savings available up until September.

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

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Who Is Eligible for Stamp Duty Holiday? 

The stamp duty holiday is eligible for all people buying residential property in the UK or Northern Ireland between July 2020 and September 2021.

Those buying a primary residence can enjoy zero stamp duty tax on properties worth less than £500,000 until June 2021, with a lower threshold of £250,000 available until September.

Stamp duty on investment property purchases doesn’t allow a full tax break, but the percentage of stamp duty tax payable is lower during this period.

Rates of stamp duty in the UK also apply to overseas buyers, which means that if you’re a non-UK resident that’s looking to invest in UK property, you’re eligible for stamp duty tax discounts.

Vector Illustration of Scotland Map Vector Illustration of Scotland Map

How Do You Qualify for Stamp Duty Holiday? 

To qualify for stamp duty holiday tax savings, you’ll need to complete on your property purchase before 30th June 2021 to benefit from the higher stamp duty threshold of £500,000.

After this, you can benefit from a tax threshold of £250,000 if you complete on your property purchase between 1st July and 30th September.

Does the Stamp Duty Holiday Apply in Scotland? 

Yes, the stamp duty holiday applies to property purchases made in Scotland. Land and buildings transaction tax has its own temporary tax threshold of £250,000.

Unlike the stamp duty holiday in England and Northern Ireland, the tax break on land and buildings transaction tax hasn’t been extended, so it will end on 31st March.

Until 30th June, no land transaction tax will be payable on property in Wales Until 30th June, no land transaction tax will be payable on property in Wales

Does the Stamp Duty Holiday Apply in Wales? 

Yes, those buying property in Wales can benefit from land transaction tax savings, which is the Welsh equivalent of stamp duty tax.

Until 30th June, no land transaction tax will be payable on buy to live property purchases of a primary home. Stamp duty on buy to let properties or second homes remains the same in Wales during this time.

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 calculators for 2021.

We have a stamp duty calculator for second home and buy to let purchases along with a stamp duty calculator for first-time buyers or those purchasing a main buy to live residence.

The stamp duty holiday is offering cut rates up until the end of September 2021, so there is still time to make huge savings on property.

Amy Jackson, RWinvest

How to Calculate Stamp Duty 

Stamp Duty can be calculated in two ways. You can either use a stamp duty calculator like the ones 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.

We have both a stamp duty calculator for rates before the stamp duty holiday as well as a calculator for usual residential stamp duty rates for those wondering ‘how much is stamp duty normally?’.

Stamp Duty Holiday Calculator: How Much Stamp Duty Will I Pay Until June 2021?

Stamp Duty due: £0
Effective Rate: 0%

See Full Calculation below:

Tax Brand % Taxable Sum Tax
less than £500k 0% £0 £0
£500k 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 £500k 3% £250,000 £7500
£500k 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 £500k 0% £0 £0
£500k to £925k 5% £0 £0
£925k to £1.5m 10% £0 £0
rest over £1.5m 12% £0 £0

Stamp Duty Calculator Before Holiday: How Much Is Stamp Duty Normally?

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

Stamp Duty Holiday Rates based on property price table Stamp Duty Holiday Rates based on property price table

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 and the rates to expect once the stamp duty holiday ends.

How to Work Out Stamp Duty (Stamp Duty Holiday Rates) 

If you’d like to know how to work out stamp duty yourself, without the help of a stamp duty calculator, you can use the stamp duty table below, which outlines stamp duty costs for UK investors buying property before 30th June 2021.

This stamp duty table shows you how much money in stamp duty fees you’re expected to pay.

Stamp duty tax vector illustration Stamp duty tax vector illustration

How Much Stamp Duty Do I Have to Pay During the Stamp Duty Holiday? 

With the new stamp duty holiday set to last until the end of June 2021, the new stamp duty tax threshold for buy-to-live purchases of a primary residence is £500,000. Between June and September 2021, the stamp duty threshold is £250,000.

When it comes to stamp duty for buy to let purchases, the threshold for stamp duty costs in the UK has not changed, but the amount that investors will need to pay in stamp duty fees has.

Between now and 30th June, buy to let investors only pay a stamp duty percentage of 3% on properties with a value of up to £500,000, which is a significant discount.

Between June and September, a 3% tax will be payable on properties worth up to £250,000.

Stamp Duty Holiday Stamp Duty Holiday

How Much Stamp Duty on £250k Property During the Stamp Duty Holiday? 

Between now and 30th June 2021, stamp duty for buy to let property or a second home will incur 3% tax on property worth £250k.

The same applies to buy to let purchases made between 30th June and 30th September 2021.

For those wondering how much stamp duty on £250k needs to be paid on primary buy to live purchases, no stamp duty tax will be payable on a property worth £250,000 from now until 30th September 2021.

After 1st October, normal stamp duty costs will apply.

I’m a Buy to Let Investor – How Much Will I Save in Stamp Duty Tax on a £200,000 Purchase? 

During the stamp duty holiday, the cost of stamp duty for buy to let purchases worth £200,000 will come to £6,000 before 30th June 2021.

The standard rate of buy to let stamp duty tax would be £7,500, meaning you would save £1,500 in stamp duty tax on a property of this value.

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Stamp Duty Normal Rates table Stamp Duty Normal Rates table

How to Work Out Stamp Duty (Normal Rates) 

So, we know how much stamp duty costs during the temporary tax break, but how much is stamp duty normally?

If you want to know how to work out stamp duty tax on purchases made after 30th September, 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 that is payable after the stamp duty holiday ends.

What Is the Stamp Duty Threshold After the Stamp Duty Holiday? 

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 normally £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 usual threshold is £40,000, with the percentage of stamp duty owed increasing as the property price rises.

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).

Below, you can see the usual 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 after 31st March 2021.

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As mentioned, the stamp duty holiday also applies to Scotland’s land and buildings transaction tax.

In Scotland, buy to live buyers will only pay tax on property with a value of £250,000, while buy to let investors or those buying a second property will be required to pay the same amount of tax as they did before.

In Wales, land transaction tax has also benefited from a tax break, similar to the stamp duty holiday. However, unlike the £500,000 threshold for the stamp duty holiday, the tax threshold is lower on the land transaction tax break.

 

In the below table, you can see the land transaction tax thresholds for those buying property in Wales after 30th June 2021, which is when the temporary tax break ends.

In Wales, temporary tax cuts are similar to those in Scotland.

Those making a buy to live purchase of a primary residence will pay zero tax on properties worth less than £250,000, while buy to let or second home purchases will incur the same stamp duty tax prices.

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.

Stamp duty payments can get hefty, which is why the current cut tax rates are so ideal for investors. As it stands, 2021 is one of the best times to invest because of this.

Amy Jackson, RWinvest

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 March 2021.

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Manchester Prices from £179,950

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Luton Prices from £179,950

5% Rental Returns 

75% Sold Out - Units Selling Fast

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Liverpool Prices from £139,950

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