Everything you need to know about stamp duty

What is stamp duty, and what does it pay for?

Stamp Duty Land Tax is a payment to the Government in order to get a Certificate of Land Ownership from the HM Revenue & Customs, which states that the land on which your new property sits is legally and officially owned by and registered to you.

If you need to pay stamp duty but don’t pay it, you won’t be allowed to officially purchase your new home.  Be sure to discuss with your solicitor whether or not you will need to pay stamp duty on your new home, and how much it will be, that way you can make sure that you factor in this cost and don’t miss the payment deadline.

How much stamp duty will I need to pay?

The table below can be used to help you work out the amount of stamp duty that is due. Please note that an added rate of 3% applies to buying of additional properties. 

You can use the Government's Stamp Duty Land Tax (SDLT) calculator to find out how much you would pay.

Do I still need to pay stamp duty if I’m a first time buyer?

If you’re buying your first home you can get a discount. Both you and anyone else you’re buying with would need to be first time buyers. 

This means you will pay:

• No stamp duty up to £425,000
• 5% stamp duty on the portion from £425,001 to £625,000

If the price is over £625,000 you cannot get the discount.

When does stamp duty need to be paid, and how do I pay it?

If you need to pay stamp duty, you must pay within 30 days from the date you complete the purchase of your home – when the contracts are signed and dated, and you have your keys. Your solicitor will usually arrange the payment of stamp duty for you, often before your purchase is completed, but it’s your legal responsibility to ensure that your stamp duty is paid.

If your stamp duty isn’t paid within the required 30 days, you may be fined and even charged interest on the remaining cost, so it’s really important not to leave it until the last minute.

How does stamp duty apply to new build houses?

If the property you are buying is a new build, stamp duty will be owed on the price you are paying for your new home (if it is more than £250,000), which will include fixtures and fittings that are ‘attached’ to the building – for example, kitchens and fitted wardrobes. 

Can I add stamp duty to my mortgage?

It’s not possible to add the cost of stamp duty to your mortgage. If the amount of the property you want to buy is more than £250,000, you’ll need to include in the cost of stamp duty along with how much you have for a deposit, and how much you want to borrow for your mortgage.

If you have more questions about stamp duty or any other part of your home buying journey, why not book an appointment with one of our mortgage advisers.