What Is Stamp Duty and How Much Will It Cost?
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Stamp duty is a tax that is paid by those purchasing property in the UK. Stamp duty tax varies slightly by location. In England and Northern Ireland, this tax is named stamp duty land tax, while in Scotland it’s land and buildings transaction tax and in Wales, it’s land transaction tax.
The amount that each individual buyer has to pay depends on their circumstances and the overall cost of the property. Normally, those purchasing a buy to let property would need to pay 3% tax on anything under £125,000, 5% tax on a property worth £125,000 to £250,000, and 8% on a value of £250,000 to £925,000. The percentages change for buy to live purchases. For buy to live purchases (provided the buyer sells their previous home), a property worth less than £125,000 requires zero tax, while a value of £125,000 to £250,000 would call for a tax of 2%, and 5% tax for a value of between £250,000 to £925,000. Meanwhile, first-time buyers of a buy to live property are exempt from stamp duty tax on properties worth less than £300,000.
With these new UK stamp duty rules, those buying a residential property only need to pay stamp duty on properties with a value of over £500,000, while buy to let investors will pay 3% tax on a property up to the same value. On property purchases made between June and September 2021, residential purchases only require stamp duty tax on properties worth £250,000 or less, while a 3% tax will be implemented on buy to let purchases of the same price.