What is Stamp Duty?
Stamp duty is the historic name for a tax on property transactions. It is literally named after the official stamp which was put on property transaction documents to certify them.
These days there are different names and rates across the countries of the UK. In Scotland it is called the Land and Business Transaction Tax, or LBTT. In Wales it is the Land Transaction Tax, or LTT. In England and Northern Ireland it is called Stamp Duty Land Tax, or SDLT.
The tax is calculated using the property purchase price. There is usually a threshold value, with the proportion below this being free of stamp duty. Above this threshold, the rates are calculated in bands.
Who pays the Stamp Duty?
Stamp duty is paid by the purchaser. In Scotland and Wales it is required to be paid within 30 days of the property sale completing. In England & NI it is required to be paid within 14 days of the effective transaction date.
What are the rates of LBTT in Scotland?
The current threshold is £145,000, so if the purchase price is less than this, there is no LBTT due.
|
Price threshold |
LBTT rate |
|
Portion up to £145,000 |
0% |
|
Portion from £145,001 to £250,000 |
2% |
|
Portion from £250,001 to £325,000 |
5% |
|
Portion from £325,001 to £750,000 |
10% |
|
Portion over £750,001 |
12% |
Currently, there is first time buyers relief which increases the 0% threshold up to £175,000. The 2% threshold then starts at £175,001. The remaining thresholds remain unchanged.
Source: Gov – Stamp Duty & Land Tax
What are the rates of LTT in Wales?
The current threshold is £225,000, so if the purchase price is less than this, there is no LTT due.
|
Price threshold |
LTT rate |
|
Portion up to £250,000 |
0% |
|
Portion from £250,001 to £400,000 |
6% |
|
Portion from £400,001 to £750,000 |
7.5% |
|
Portion from £750,001 to £1,500,000 |
10% |
|
Portion over £1,500,001 |
12% |
Source: https://www.gov.wales/land-transaction-tax-guide
What are the rates of SDLT in England & Northern Ireland?
The current threshold is £250,000, so if the purchase price is less than this, there is no SDLT due.
|
Price threshold |
SDLT rate |
|
Portion up to £250,000 |
0% |
|
Portion from £250,001 to £925,000 |
5% |
|
Portion from £925,001 to £1,500,000 |
10% |
|
Portion over £1,500,001 |
12% |
Currently, there is a first time buyers discount which increases the 0% threshold up to £425,000. The 5% threshold then starts at £425,001, up to £625,000. If the purchase price is over £625,000 you cannot claim the discount.
Additional property premium rates
If you are buying a second or additional property, there are higher rates which apply. This covers holiday homes as well as buy to let properties.
Source: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
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