Published On: Tue, Aug 27th, 2019

How Stamp Duty is calculated: How to work out how much you will pay on your new home | Personal Finance | Finance

Stamp Duty Land Tax (SDLT) is usually paid on increasing portions of the property price above the threshold, when one buys property or land in England and Northern Ireland. Currently, this stands at £125,000 for residential properties and £150,000 for non-residential land and properties. Stamp Duty Land Tax rates vary depending on the band that the portion comes under. For instance, up to £125,000, the SDLT rate is zero.

The next £125,000 – so the portion from £125,001 to £250,000 – is charged at a two per cent SDLT rate.

The next £675,000, with this being the portion from £250,001 to £925,000, is subject to a Stamp Duty rate of five per cent.

Between £925,001 to £1.5 million, so for the next 575,000, SDLT is charged at a 10 per cent rate.

The remaining amount, being the portion greater than £1.5 million, is subject to SDLT at the rate of 12 per cent.

Should a person not wish to crunch the numbers themselves, Stamp Duty calculators are available online.

It may also be worth remembering that different circumstances may mean that a discounted or greater amount of Stamp Duty is required to be paid.

For instance, a first-time buyer may be able to claim Stamp Duty relief.

This only applies if all of the buyers are first-time buyer, and the purchases is completed on or after November 22, 2017.

Additionally, the price must be £500,000 or less.

Should the buyers be eligible for the relief, Stamp Duty is not paid up to £300,000.

Any portion form £300,001 to £500,000 is subject to a five per cent SDLT rate.

If a person is buying an additional property, then higher rates usually apply.

A three per cent rate will normally need to be paid on top of the normal SDLT rates, if it means that the purchase will result in a person owning more than one home.

It may be that a person is able to get a refund on this higher rate, such as if the reason for owning more than one property at any one time was due to a delay in selling the main residence, and it was not sold on the day of completing the new purchase.

Those who then sell the previous main home within 36 months may be able to get a refund.

READ MORE: Stamp Duty Land Tax MAPPED: UK locations with biggest SDLT spend – is it where you live?

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