Stamp Duty

Stamp Duty

Fantastic news for property buyers and sellers! Here’s the lowdown on the recent stamp duty changes

Where is the property?

Here’s everything you need to know about stamp duty. 

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is the tax that must be paid when you purchase a property or a piece of land. The amount of money required for stamp duty depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a First Time Buyer.

How much will you pay?

If the property is worth between £125,001 and £250,000, the stamp duty land tax rate is 2%. So if the property was valued at £250,000, you have to pay an extra £2,500 in stamp duty tax.

For the next £675,000, the rate is 5%. If the property you are purchasing was valued between £250,001 and £925,000 bracket, the buyer will not pay any stamp duty on the first £125,000 but will pay a 2% rate on the next £125,000 and a 5% rate on the following £675,000.

First-time buyers in England and Northern Ireland are required to pay stamp duty. However, it does not apply to the first £300,000 of a main residential property if it costs less than £500,000.

In Wales, they are exempt from land transaction tax on the initial £180,000 of their home. In Scotland, they don’t have to pay land and buildings transaction tax on the first £175,000 of the sale.

House price Stamp duty rate 
Up to £125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1,500,000  10%
>£1,500,001 12%

House price example

Stamp duty 
£125,000 £0
£250,000 £2,500
£350,000 £7,500
 £500,000  £15,000
£925,000 £36,250

Benefits if you're a landlord or buying a second property

There’s also great news for landlords and those of you purchasing a second or additional property. Where previously there would have been the higher buying tax rate and an additional 3% tax fee, now anyone looking to purchase will only have to pay 3% up to £500,000. For this reason, buying property will now be cheaper for landlords.

If you are purchasing a property for under £40,000 there is no stamp duty charge. However, if the property is between £40,000 - £500,000, SDLT will be charged at 3% of the total purchase price. 

Property price

Stamp Duty Rate Additional property rate
Up to £125,000 0% 3%
£125,001 - £250,000 2% 5%
£250,001 - £925,000 5% 8%
£925,001 - £1,500,000  10% 13%
>£1,500,001 12% 15%

Benefits if you’re selling a property

If buyers are saving thousands in tax costs on the prices of their homes, they are more likely to pay your asking price. Equally, when you come to purchase a new main home, you would usually have paid a higher level of stamp duty as you’re not a First Time Buyer. However, under these new tax changes, you could find yourself saving a tidy lump sum.

So, what’s next?

Who knows when there will be an opportunity to save on stamp duty like this again? The announcement is designed to stimulate the UK economy, and at the same time, it brings with it the opportunity for buyers to save thousands.

Speak to your local John D Wood & Co. branch to discuss how you would benefit.

What is Land and Buildings Transaction Tax?

Land and Buildings Transaction Tax (LBTT) is the tax that must be paid when you purchase a property or a piece of land. It is administered by Revenue Scotland, with support from Registers of Scotland.

LBTT replaced UK Stamp Duty Land Tax in Scotland on 1 April 2015.

Similar to Stamp Duty, the amount of money required depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a First Time Buyer or purchasing an additional dwelling.

House price example

LBTT % Rate before change

LBTT % Rate after change

Up to £145,000
First time buyer (FTB) up to £175,000

0% 0%

£145,001 - £250,000
FTB £175,001 - £250,000

0% 2%
£250,001 - £325,000 5% 5%
 £325,001 - £750,000 10% 10%
Over £750,000 12% 12%

Benefits if you’re selling a home

If buyers are saving thousands in tax costs on the prices of their homes, they are more likely to pay your asking price. Equally, when you come to purchase a new main home, you would usually have paid a higher level of LBTT tax as you’re not a First Time buyer. However, under these new tax changes, you could find yourself saving a tidy lump sum.

Benefits if you’re a landlord or buying a second home

There’s also great news for landlords and those of you purchasing a second or additional property. Where previously there would have been the higher buying tax rate of ‘Additional Dwelling Supplement’ plus an additional 4% tax fee, now anyone looking to purchase will only have to pay 4% tax up to £250,000. For this reason, buying property will now be cheaper for landlords.

So, what’s next?

The change was introduced on 15th July 2020 and will remain in force until 31 March 2021.

Who knows when there will be an opportunity to save on Land and Buildings Transaction Tax like this again? The tax change is designed to give the Scottish economy a shot in the arm and, at the same time, it brings with it the opportunity for buyers to save hundreds, if not thousands.

Now is a brilliant time to move and make these savings.

What is Land Transaction Tax?

Land Transaction Tax is the tax that must be paid when you purchase a property or a piece of land. It is collected by the Welsh Revenue Authority. Similar to England’s Stamp Duty, the amount of money required depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a first-time buyer or purchasing an additional dwelling.

House price example

LTT % Rate before change

LTT % Rate after change

LTT % 1st July - 30th September

Up to £180,000 0% 0% 0%
£180,001 - £250,000 3.5% 0% 3.5%
£250,001 - £400,000 5% 5% 5%
 £400,001 - £750,000 7.5% 7.5% 7.5%
£750,001 - £1,500,000 10% 10% 10%
Over £1,500,000 12% 12% 12%

Benefits if you’re selling a home

If buyers are saving thousands in tax costs on the prices of their homes, they are more likely to pay your asking price. Equally, when you come to purchase a new main home, you would usually have paid a higher level of tax as you’re not a First Time buyer. However, under these new tax changes, you could find yourself saving a tidy lump sum.

So, what’s next?

From 27th July, the new tax threshold will be £250,000. It will remain in force until 31st March 2021.

Who knows when there will be an opportunity to save on Land Transaction Tax like this again? The tax change is designed to give the Welsh economy a shot in the arm and, at the same time, it brings with it the opportunity for buyers to save hundreds, if not thousands.

Now is a brilliant time to move and make these savings.

Here’s everything you need to know about stamp duty. 

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is the tax that must be paid when you purchase a property or a piece of land. The amount of money required for stamp duty depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a First Time Buyer. 

How much will you pay?

If the property is worth between £125,001 and £250,000, the stamp duty land tax rate is 2%. So if the property was valued at £250,000, you have to pay an extra £2,500 in stamp duty tax.

For the next £675,000, the rate is 5%. If the property you are purchasing was valued between £250,001 and £925,000 bracket, the buyer will not pay any stamp duty on the first £125,000 but will pay a 2% rate on the next £125,000 and a 5% rate on the following £675,000. 

First-time buyers in England and Northern Ireland are required to pay stamp duty. However, it does not apply to the first £300,000 of a main residential property if it costs less than £500,000.

In Wales, they are exempt from land transaction tax on the initial £180,000 of their home. In Scotland, they don’t have to pay land and buildings transaction tax on the first £175,000 of the sale.

Property price

Stamp Duty Rate Additional property rate
Up to £125,000 0% 3%
£125,001 - £250,000 2% 5%
£250,001 - £925,000 5% 8%
£925,001 - £1,500,000  10% 13%
>£1,500,001 12% 15%

It's time to get moving

Now is a brilliant time to move and make these savings.