What is stamp duty?
Stamp duty is a tax payable as a percentage of the purchase price of a property. You’ll also see it referred to as Stamp Duty Land Tax (SDLT). The current rates are as follows:PURCHASE PRICE OF PROPERTY | STAMP DUTY RATE | STAMP DUTY RATE FOR ADDITIONAL PROPERTIES |
UP TO £250,000 | 0% | 3% |
£250,001 to £925,000 | 5% | 8% |
£925,001 to £1.5M | 10% | 13% |
Over £1.5M | 12% | 15% |
How it works
To illustrate: You buy your dream second home for £2M. How much stamp duty do you pay? You do not owe 15% of £2M (which would be £300,000).Instead, you pay 3% on the first £250K (£7,500), 8% on the part between £250K and £925K (£54,000), 13% on the part between £925K and £1.5M (£74,950), and then on the final £500K, the SDLT would be £75,000. This gives a grand total of £211,450.You don’t have to do these laborious calculations – there are online calculators that will crunch the numbers for you:- Stamp duty calculator on Gov.uk website
- Tool to calculate stamp duty on second homes from John Charcol