Mortgage Glossary: Stamp Duty (Housing)

Stamp Duty (Housing)

Stamp Duty Land Tax is payable to the government when you buy a property or land over a certain price in England and Northern Ireland.

In Wales and Scotland the process is slightly different. In Wales buyers instead pay a Land and Buildings Transaction Tax, while in Scotland a Land Transaction Tax is liable if the sale was completed on or after 1 April 2018.

Stamp duty is liable when a buyer:

Buys a freehold or leasehold property
Buys a property through a shared ownership scheme
Is transferred land or property in exchange for payment, for example taking on a mortgage or buying a share in a house

Thresholds of the value of a home apply for stamp duty. If a property is bought for less than the thresholds there is no stamp duty to pay.

The thresholds are:

£125,000 for residential properties
£150,000 for non-residential land and properties

First time buyers are entitled to a discount on stamp duty. This means they pay less or no tax if they or anyone else they are buying with are first-time buyers and the purchase price is £500,000 or less.

The government has provided a Stamp Duty Land Tax calculator to work out how much is liable.

Stamp duty is liable within 14 days of completion. Solicitors will usually file a return on the day of completion and add the amount to their fees.

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