What is stamp duty?
Stamp Duty Land Tax (SDLT) is a tax paid by the buyer of a UK residential property. Up until 30 June 2021, stamp duty is paid when the purchase price exceeds £500,000. On 1 July 2021, the threshold will reduce to £250,000 until 30 September 2021 and then from 1 October 2021, the threshold will revert to £125,000. The stamp duty rate ranges from 2% to 12% of the purchase price, depending upon the value of the property bought, the purchase date and whether you are a multiple home owner.
Up until 30 June 2021, the special rules for first time buyers are replaced by the increased threshold of £500,000.
Anyone purchasing an ‘additional’ residential property will be charged a 3% surcharge on each of the threshold bands.
Companies buying residential property less than £500,000 between 8 July 2020 and 30 June 2021 will benefit from the government changes, as will companies that buy residential property of any value when they meet the relief conditions from the corporate 15% SDLT charge.
If you are buying to let, as a landlord, you will have to pay SDLT if the income from a short term property let (up to seven years), residential tenancy or lease is above the threshold.
From 1 April 2021, a 2% surcharge will be added to each of the rates below for buyers who are non-UK residents
What are the standard tax band thresholds between 8 July 2020 and 30 June 2021?
| For the purchase of a main residence | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Up to £500,000 | 0% |
| The next £425,000 (the portion from £500,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
| For the purchase of ‘additional’ property | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Up to £500,000 | 3% |
| The next £425,000 (the portion from £500,001 to £925,000) | 8% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 13% |
| The remaining amount (the portion above £1.5 million) | 15% |
What are the standard tax band thresholds between 1 July 2021 and 30 September 2021?
| For the purchase of a main residence | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Up to £250,000 | 0% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
| For the purchase of ‘additional’ property | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Up to £250,000 | 3% |
| The next £675,000 (the portion from £250,001 to £925,000) | 8% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 13% |
| The remaining amount (the portion above £1.5 million) | 15% |
On the 1 October 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020, which are as follows:
| For the purchase of a main residence | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Between £40,001 and £125,000 | 0% |
| Between £125,001 and £250,000 | 2% |
| Between £250,001 and £925,000 | 5% |
| Between £925,001 and £1.5 million | 10% |
| Over £1.5 million | 12% |
| For the purchase of ‘additional’ property | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Between £40,001 and £125,000 | 3% |
| Between £125,001 and £250,000 | 5% |
| Between £250,001 and £925,000 | 8% |
| Between £925,001 and £1.5 million | 13% |
| Over £1.5 million | 15% |
What are the stamp duty rates for first time buyers?
From 8 July 2020 to 30 June 2021 the special rules for first time buyers are replaced by the reduced rates set out above.
From 1 July 2021, first time buyers purchasing a property up to £500,000 in value will be eligible for the discounted stamp duty rates below. To be eligible, you and anyone you are purchasing with must be first time buyers.
| For the purchase of a main residence | |
|---|---|
| Purchase price bands (£) | Rate (%) |
| Up to £300,000 | 0% |
| Between £300,001 and £500,000 | 5% |
If your property costs more than £500,000 in value, there will be no first time buyer exemption and the standard rates will apply.
I currently/will own more than one property. Will I be liable for more stamp duty?
Unless you are selling and replacing your main residence, the purchase of a property in addition to your main residence is likely to be liable for the surcharge. To find out more and to understand how you pay stamp duty speak to one of our experts at Londonwide Conveyancing.
For help calculating the amount of SDLT which you might owe on residential properties use our stamp duty calculator.