My First Property

What Are The Current Stamp Duty Rates?

If you want to calculate what the stamp duty is going to be on a property, then the easiest way is to use our online calculator tool.

You can do this by clicking the link below:

Stamp Duty Calculator.

However it is very useful to know how stamp duty works, particularly since it has changed relatively recently into a sliding scale instead of absolute banding.

It used to be the case that stamp duty was banded. This meant that when you moved from one band to the next - for instance the property went above £250,000 - then there was a huge rise in stamp duty due to a change of band.

And what this meant is that typically there were no houses available at the price just above a certain band, as the stamp duty rise was such that it made it too unattractive for purchasers.

The relatively new scheme is a lot more sensible and stops this happening, as the stamp duty is on a sliding scale.

This means that if you buy a property of a given amount, the stamp duty due may vary on different amounts of the capital.

There is no money due (no stamp duty) on a property worth under £125,000 for instance.

Now, if the property is worth up to £250,000, then you pay 2% tax on it: but crucially, only on the part of the property worth more than £125,000. Which clearly means you pay 2% on £125,000, not 2% on £250,000, and this is where the sliding scale of stamp duty differs from the previous system and seems more sensible than the old absolute boundary approach.

There are various other rates on the sliding scale too, and the direction of travel is up: the more the house costs, the more stamp duty the government demands on each rising portion. Indeed, the top stamp duty rate is 12%, so pretty significant: though to hit that figure the property will need to be worth more than £1,500,000 - a really high amount, though actually in London surprisingly common in some places!

In between these there are various other tiers, these are at levels of 5% and 10%. And 5% is paid on the element that takes a property up to £925,000 (above the £250,000 threshold) whilst 10% is paid on the £575,000 above that, before the 12% rate kicks in.

Because of the various different tiers of stamp duty it can be fairly tedious to perform the calculation by hand and can easily lead to mistakes, which is why we recommend you use our Stamp Duty Calculator so that you don't have to perform the calculation yourself.

You might like to try performing various calculations with properties of different values, and seeing what the total stamp duty paid is. It's the best and simplest way to get a feel for how a rising price might affect stamp duty. Indeed, if you are looking at houses on the market, type their valuations into the calculator to get a feel for what the stamp duty hit will be!

Last update: 30 May 2015

More first-time house buying articles:

  1. Viewing a Property in London
  2. Find an affordable property
  3. Rejected Mortgage Application
  4. Pros and Cons of Buying at Auction
  5. Buying Your First Home In London

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