What is Stamp Duty
Stamp Duty Land Tax (SDLT) is a tax you must pay when buying a property over a certain threshold and almost everyone who purchases a property above a certain value will pay Stamp Duty at some point.
The ‘Stamp Duty Holiday’
In July 2020 the UK Government announced a Stamp Duty holiday in order to boost the UK’s housing market and help people get on, or move up the property ladder.
Until 31st March, home buyers did not have to pay Stamp Duty on the first £500,000 of a purchase price, this meant a saving of £15,000. The government later extended the holiday until 30th June and then again until 30th September and during this period home buyers didn’t have to pay Stamp Duty on the first £250,000.
Back to Reality
Now that Stamp Duty has returned to ‘normal’ pre-COVID levels, this means that the thresholds have been altered once again. From 1st October 2021, you will have to pay Stamp Duty if your property is worth over £125,000. The amount of tax you pay depends upon the value of the property you purchase.
| Property Price | Percentage of SDLT payable |
| £0-£125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| £1,500,000 + | 12% |
Stamp Duty on Second Homes
If you are buying an additional property, such as a second home, you will have to pay an extra 3% in Stamp Duty on top of the above rates for each band, this increased rate applies to properties bought for £40,000 or more.
What about First Time Buyers
The Government’s Stamp Duty holiday has boosted the property market and increased demand for properties, which has made it much more difficult for first time buyers to get on the property ladder. Now that Stamp Duty has returned to its normal rate, it is good to know that first time buyers can still benefit from Stamp Duty relief
First time buyers do not have to pay any Stamp Duty on property purchases up to £300,000 and pay a reduced rate on property purchases up to £500,000.
| Property Price | Percentage of SDLT payable |
| Up to £300,000 | 0% |
| £300,001 – £925,000.00 | 5% |
| £925,001 – £1,500,000 | 10% |
| £1,500,000+ | 12% |
Summary
Most solicitors, will submit your SDLT return on your behalf, but it is still important to note the following:
- You must complete an SDLT return to claim the relief, even if no tax is due.
- You only have 14 days from the date of completion to pay the SDLT.
- If you exceed the 14 days, you will be fined by HMRC and will incur interest.
- It is your personal responsibility to ensure that the SDLT is paid.
- If you are unsure of your SDLT obligations, please speak to your solicitor or tax advisor.
