Stamp Duty Guide

Stamp duty is a lump sum that you are liable to pay when you buy a residential property or a piece of land costing more than £250,000.00 (or more than £40,000.00 for second homes). This tax applies to freehold and leasehold properties.

Residential Stamp Duty Rates

The stamp duty rates for freehold sales and transfers, and most leasehold properties, are currently:

• 0% on the first £250,000 paid (this includes shared ownership properties if the share is under £250,000)
• 5% on the property price between £250,001 and £925,000
• 10% on the property price between £925,001 and £1,500,000
• 12% on the property price of £1,500,001 and over

Stamp Duty for First Time Buyers

If you are a first-time buyer, you are exempt from stamp duty for properties up to £425,000.00. If you buy a property up to £500,000 you will pay no Stamp Duty on the first £425,000 and only pay on the remaining amount.

You can only qualify as a first-time buyer if you have never owned a property in England or overseas. If you are buying as joint owners you must both be first time buyers. If you are not sure whether you qualify as a first time buyer, please speak to our Johnson Astills  Conveyancing team in Leicester or Loughborough and we will be more than happy to discuss.

Stamp duty Buy-To-Let  

If you are buying additional property, you will have to pay an extra 3% in stamp duty. This includes buy to lets and second homes. This higher rate will not apply if you are purchasing a caravan, mobile home or houseboat, or if the total property value is under £40,000.

It is important to note that if you purchase a new home before you have sold your first property you will also have to pay the additional 3% SDLT. If you are able to sell your property within 18 months of buying your new property, you may be entitled to reclaim a refund.

Exemptions

There are certain situations in which you may be eligible for SDLT reliefs and exemptions –

You do not have to pay SDLT or file a return if:

• property is left to you in a will
• property is transferred because of divorce or separation
• property is given as a gift or transferred with no money or other payment exchanging hands

How do you pay stamp duty?

At Johnson Astills we will submit the return on your behalf as part of the purchase transaction. The amount will be taken from you prior to completion and will be paid within the 14 days of the 'effective date' of completion. An SDLT return must be provided to HM Revenue & Customs even if no tax is due.   

If you require assistance or further information, please contact our Johnson Astills Conveyancing Team on 0116 255 4855 (Leicester), or 01509 610 312 (Loughborough).