Stamp duty October 2021

Learn more about stamp duty in the UK using our in-depth guide.

Stamp duty update, 1 October 2021

The stamp duty holiday – which ran from 8 July 2020 to 30 June 2021 and meant there was no stamp duty to pay on the first £500,000 of a property purchase – has now been phased out. Stamp duty rates have returned to normal, which means that home buyers will again start to pay stamp duty on property purchases of more than £125,000.

Stamp duty rates in England and Northern Ireland from 1 October 2021

Stamp duty rates in England and Northern Ireland are exactly the same. It is officially called stamp duty land tax (SDLT).

  • Portion costing between £0-£125,000: 0%
  • Portion costing between £125,001-£250,000: 2%
  • Portion costing between £250,001-£925,000: 5%
  • Portion costing between £925,001-£1.5m: 10%
  • Portion costing over £1.5m: 12%

Stamp duty in Scotland (LBTT) – Rates October 2021

Stamp duty in Scotland is called “land and buildings transaction tax” (LBTT).

For home movers

  • Portion costing between £0-£250,000: 0%
  • Portion costing between £250,001 and £325,000: 5%
  • Portion costing between £325,001 and £750,000: 10%
  • Portion costing over £750,001: 12%

For second homes

  • Portion costing between £0-£250,000: 3% (although you’ll pay no stamp duty on purchases below £40,000).
  • Portion costing between £250,001 and £325,000: 8%
  • Portion costing between £325,001 and £750,000: 13%
  • Portion costing over £750,001: 15%

Stamp duty in Wales (LTT) – Rates October 2021

Stamp duty in Wales is called “land transaction tax” (LTT).

For home movers and first-time buyers

  • Portion costing between £0-£250,000: 0%
  • Portion costing between £250,001 and £400,000: 5%
  • Portion costing between £400,001 and £750,000: 7.5%
  • Portion costing between £750,001 and £1.5m: 10%
  • Portion costing over £1.5m: 12%

For second homes

  • Portion costing between £0-£250,000: 3%
  • Portion costing between £250,001 and £400,000: 8%
  • Portion costing between £400,001 and £750,000: 10.5%
  • Portion costing between £750,001 and £1.5m: 13%
  • Portion costing over £1.5m: 15%

How and when do I pay stamp duty?

Your stamp duty bill is due no more than 30 days after you complete the purchase of a property. Your conveyancer will usually send your stamp duty payment to HMRC on your behalf on completion day.

It is sometimes to possible to borrow more from your mortgage lender to fund your stamp duty bill. However, this should be avoided as it means you’ll be paying interest on it for the entirety of your mortgage term.

There is a small list of cases where you’ll be exempt from stamp duty, including with inherited properties, zero-carbon home purchases under £500,000, some Right To Buy transactions and charity purchases. The full list is available on the HMRC website.

Do I have to pay stamp duty?

If a property costs under a specific amount, you won’t have to pay any stamp duty.

There are also other exemptions. You won’t pay stamp duty in the following situations:

  • Property is left to you in a will
  • Property is transferred to you as a gift
  • Property is transferred to you because of divorce or dissolution of a civil partnership
  • You buy a lease of less than seven years (provided it costs less than the stamp duty bill)
  • You use alternative finance arrangements, such as those that comply with sharia law

There are numerous circumstances where you may be eligible for stamp duty relief. These include the following:

  • Some Right To Buy transactions
  • When buying multiple properties
  • House-building companies buying an individual’s home
  • Employers buying an employee’s home
  • Local authorities making compulsory purchases
  • Inter-company property transfers
  • Charities buying property
  • Purchases by registered social landlords

How much stamp duty will I pay if I buy a new home before selling my old one?

You’ll have to pay the rate for second homes (an additional 3%) but you can claim a refund if you sell your previous home within 36 months of buying the new one. You’ll have 12 months from the sale of your old home to claim this refund.

The same rules apply if you have your name removed from the deeds of a property.

Can I add stamp duty onto my mortgage?

Some lenders will lend you extra money to cover the cost of your stamp duty and add this to your mortgage.

This isn’t ideal though because you’ll be paying interest on this figure for the entirety of your mortgage term.

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