Stamp Duty

The current stamp duty rates in England and Northern Ireland are shown in the table below:

Band Normal Rate Additional Property
* An additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £125k the rate will be 3% on full purchase price.
Less than £125k 0% 3%*
£125k to £250k 2% 5%
£250k to £925k 5% 8%
£925k to £1.5m 10% 13%
Rest over £1.5m 12% 15%

For a single property purchase, no SDLT will be paid on the first £125,000. Between £125,000 and £250,000 buyers will pay 2% within this band, 5% on the portion between £250,000 and £925,000, 10% within the next band up to £1.5 million and 12% over that. For additional property, such as buy to let or second homes, there is now a 3% surcharge applied to all bands.

Stamp Duty for Second Homes

Stamp duty tax for second home purchases has risen substantially from April 2016.

In his 2015 Autumn statement the chancellor announced an increase in stamp duty levels for anyone buying an additional property including second homes. From April 2016 homeowners purchasing a second home will pay considerably more in stamp duty.

Second homes will attract an additional surcharge even if they are not let out. With a much lower starting threshold of £40,000, most second home purchases now attract an additional 3% stamp duty tax.

Stamp Duty for first time buyers

Stamp duty has now been abolished for most first time buyers in England and Northern Ireland.

A permanent change to the initial stamp duty threshold for first time buyers means that anyone buying their first home won't be liable for stamp duty if the purchase price is below £300,000.

Further relief is available for purchases up to £500,000 to help first time buyers in more expensive locations such as London.

Impact of the changes

The Government predict that the stamp duty changes will help up to 95% of first time buyers in England and Northern Ireland and up to 80% in London.

The new relief has been introduced with immediate effect and applies to anyone purchasing their first home from November 22nd, 2017.

How does it work?

First time buyers will need to declare that they have never owned a property either in the UK or abroad. A special first-time buyer code will need to be submitted with the stamp duty return once a home is purchased.

Full Stamp Duty relief is available up to £300,000, with reduced liability up to £500,000. Any purchases above £500,000 will attract the normal stamp duty rates on the whole purchase price.

Joint purchasers

If a property is being purchased by more than one individual then all parties will need to be first time buyers to qualify for the relief.

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