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Stamp duty. Two words that strike fear into the minds of every home buyer. But do you really know how it’s calculated and ultimately how much you’ll pay?

One of former Chancellor George Osborne’s most popular moves was the abolition of the ‘slab’system of stamp duty land tax. Prior to the change in 2014 buyers paid stamp duty based on the price of the property, but it was applied to the whole value of the home.

This meant that if your property was just £1 above one of the thresholds you’d have to pay far greater levels of stamp duty compared with a house that was £1 cheaper and just below the threshold. But now home buyers pay a graduated rate so that the higher rates only apply to the amount over each threshold. Much better!

In England and Northern Ireland stamp duty is more commonly known as Stamp Duty Land Tax, In Wales it is referred to as Land Transaction Tax and in Scotland it is known as Land and Buildings Transaction Tax. Depending on the country in which you are purchasing a property, different rules and tax calculations will be applied.

England and Northern Ireland

Based on a traditional residential mortgage for the average English property value of £243,639, according to the latest UK House Price Index, your total for stamp duty would be £2,372.

 

Price Bracket

page1image1464416032

%

£

£0 – £125,000

0%

£0

£125,001 – £250,000

page1image1464417024

2%

£2372

£250,001 – £925,000

page1image1464421312

5%

page1image1464465440

£0

£925,001 – £1,500,000

10%

£0

£1,500,001 +

12%

£0

page1image1464375264

 

Scotland

Based on a traditional residential mortgage for the average Scottish property value of £148,952, according to the latest UK House Price Index, your total for stamp duty would be £79.

 

Price Bracket

%

page1image1464368112

£

£0 – £145,000

page1image1464586208 page1image1464438544

0%

£0

£145,001 – £250,000

2%

£79

£250,001 – £325,000

5%

page1image1467367088

£0

£325,001 – £750,000

10%

£0

£750,001 +

12%

page1image1467385648

£0

 

Wales

Based on a traditional residential mortgage for the average Welsh property value of £156,495, according to the latest UK House Price Index, your total for stamp duty would be £0.

 

Price Bracket

%

page1image1466670608 page1image1466671120

£

£0 – £180,000

0%

£0

£180,001 – £250,000

3.5%

page1image1466690880

£0

£250,001 – £400,000

5%

£0

£400,001 – £750,000

7.5%

page1image1465209584

£0

£750,001 – £1,500,000

10%

£0

£1,500,001 +

12%

page1image1465259184

£0

 

However, if you’re a first-time buyer in England and Northern Ireland purchasing a home for£300,000 or less you’ll be exempt from stamp duty altogether. You’ll be charged 5% on anything over £300,000 up to £500,000 – anything over £500,000 and you won’t be entitled to discounted rates. These discounted rates also don’t apply for first-time buyers in Wales whereas first-time buyers in Scotland are exempt up to £175,000.

Also, different stamp duty thresholds and different tax rules and calculations will apply to second properties, buy-to-let properties and other factors like whether it’s shared ownership.

If you want to calculate how much stamp duty you’d have to pay depending on your circumstances, use this handy tool https://bit.ly/2REZVBE for free!

If you’d like more information or to discuss your buying options contact your adviser today.

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