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UK Stamp Duty - Current rates

Stamp Duty in the UK is the quaint old term for the government's slice of the action on your home purchase. That's right it's a tax.

It’s not just the seller who makes money when you buy a house. The Government gains too – in the form of stamp duty.

It makes around £5 billion a year from this 300-year-old property transfer tax.

Unless you’re buying in an area it has designated as ‘disadvantaged’, you’ll be obliged to pay if your chosen property costs more than £125,000.

Current Stamp Duty Rates Bands

The amount charged depends on the purchase price of the property. The latest rates for UK Stamp Duty are as follows:

Purchase price of property	Stamp Duty Payable
Up to £175,000	0
Over £175,000 to £250,000	1%
Over £250,000 to £500,000	3%
£500,001 plus	4%

To see the exact amount you would pay for a property see the Stamp Duty Calculator

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The Politics of Stamp Duty

In 2001, the Government scrapped stamp duty on properties costing up to £150,000 in the most disadvantaged areas.

It hoped to stimulate residential sales in locations where many properties were virtually unsellable.

In his 2005 Budget, the then Chancellor, Gordon Brown, lifted the threshold at which stamp duty became payable from £60,000 to £120,000. In 2006, he increased it to £125,000.

He said he was doing it to help first-time buyers.

But, with the average house now costing close to £185,000, and the average first-time buyer taking on a mortgage of £130,000, many people see this as too little, too late.

Apportioning Stamp Duty

It’s important to keep the stamp duty bands in mind when you agree a purchase price for a property.

Buy for £125,000 and there’s no tax due, but pay £125,001, and you’ll face a bill for £1,250.01.

There’s an even more painful jump if your property costs just above the £250,000 barrier.

Pay exactly £250,000, and you’ll be charged £2,500. Pay £250,001 and this leaps £5,000 (and some loose change) to £7,500.03.

When the price of a property is just above the £125,000, £250,000 or £500,000 threshold, ‘apportioning’ is often used to push it back into a lower stamp duty bracket.

The purchaser and seller agree a price that falls just below the threshold, but the purchaser undertakes to pay an additional sum for ‘fixtures and fittings’ – which could include things like curtains, carpets or white goods – taking the total price to a level the seller is happy with.

But be warned: Revenue & Customs checks a proportion of these transactions and will challenge any that arouse its suspicions.

So if you come to an apportioning deal, make sure you can prove the sum involved was realistic – and that the transaction actually took place – or the Revenue could come after you for unpaid tax.

Remember, tax evasion is a serious matter and in extreme cases can lead to a prison sentence.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below

Value of Property £ (eg 125000) Borrow How Much? £ (eg 92500) Your Mortgage Type    - please select - Re-Mortgage Purchase Buy to Let Overseas   First time buyer? Yes No Have you found property? Yes No Country   - please select - Andorra Australia Bahamas Barbados Belgium Belize Bulgaria BVI Cayman Islands Cyprus Canada Dutch Antilles France Greece Ireland Italy Jamaica Malta Mexico New Zealand Poland Portugal Spain St. Lucia Switzerland Trinidad & Tobago Turks & Caicos USA Other.. Sorry ! The amount you want to borrow is less than £25,000. This is the minimum allowed for a mortgage. But don't worry ! You could get the money via a personal loan. I want a free no obligation loan quote Click OK No thanks. I will change my borrow amount to more than £25,000 Click Cancel

Disadvantaged Areas Excluded from Stamp Duty

If the property you’re buying is in an area the Government considers to be disadvantaged, it will be exempt from stamp duty if it costs £150,000 or less.

Revenue & Customs has an online database where you can check whether any property you’re interested in qualifies for this exemption.

Click on the link for a list of qualifying areas in each part of the UK:

England

Northern Ireland

Scotland

Wales

 

 

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Please note, this information is NOT necessarily RELEVANT in Scotland

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Costs of Buying a Home

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