Stamp Duty: What is it, and how much am I required to pay?

Rachel Reeves' Autumn Budget, which she will announce on Wednesday 30 October, is not expected to change the current level of stamp duty thresholds.

The threshold may be reduced in March 2025.

If the Conservatives won the election, they had promised to keep the threshold for stamp duty at £425,000. Reeves will likely allow thresholds to return to the levels before Liz Truss’ mini-Budget.

• When will the budget be released and what could it contain?

Who is required to pay stamp duty? 

Stamp Duty Land Tax is due when you purchase a property in England or Northern Ireland that exceeds a certain amount.

When you:

• Buy a Freehold Property

• Buy a new leasehold or an existing one

• Buy a property using a shared ownership plan

• Take out a mortgage on a home or purchase a share of a property

Stamp duty is based on the value of the property and whether or not it will be used as a residential property. It also depends if you own other properties.

What is the stamp duty rate?

Stamp duty is not charged to buyers of properties worth less than £250,000. Liz Truss’s mini-Budget of September 2022 doubled this amount from £125,000.

For those purchasing their first home, the threshold is £425,000. The threshold was increased from £300,000. This was part of the mini Budget.

The Conservatives' changes to the thresholds could be reversed in the Autumn Budget of this year.

The changes in stamp duty are expected to raise nearly £2bn between 2029-30.

• £0-£250,000 = 0% (£425,000 first-time buyer)

• £250,001-£925,000 = 5%

• £925,001-£1.5m = 10%

• £1.5m+ = 12%

If you own a property worth £40,000 and above, you will have to pay an extra 3% in addition to the rates listed.

Stamp Duty Land Tax raised £15.4bn for government in 2022/23, external. This is a 9% rise on the £14.1bn in 2021/22.

• Calculate the SDLT that you will be required to pay.

What are the property prices in Scotland?

The current rates of Land and Buildings Transaction tax, external (LBTT) in Scotland are:

• £0-£145,000 = 0% (PS175,000 first-time buyer)

• £145,001-£250,000 = 2%

• £250,001-£325,000 = 5%

• £325,001-£750,000 = 10%

• £750,001+ = 12%

If the value of their share in the new property exceeds £40,000, they will also be required to pay a Additional Dwelling Subsidy (ADS), an external along with LBTT. ADS is equal to 6% of the price.

It includes those who purchase a second or third home, as well as those who rent out a property or buy a vacation home.

• Calculate the amount of LBTT that you will be required to pay.

What are the property prices in Wales?

The current rates of Land Transaction tax, external in Wales are:

• £0-£225,000 = 0%

• £225,001-£400,000 = 6%

• £400,001-£750,000 = 7.5%

• £750,001-£1.5m = 10%

• £1.5m + = 12%

The higher LTT rate is usually charged to purchasers who:

• Buy a property in the residential sector worth at least £40,000.

• Already own one or more properties

The higher rates of LTT include:

• £0-£180,000 = 4%

• £180,001-£250,000 = 7.5%

• £250,001-£400,000 = 9%

• £400,001-£750,000 = 11.5%

• £750,0001-£1,500,000 14%

• £1.5m + = 16%