Stamp Duty Calculator

Stamp Duty

Stamp duty is calculated on a stepped basis on house purchases bought for more than £250,000. However, recent changes to rules now mean that first-time buyers in England, Wales and Northern Ireland are exempt from stamp duty on purchases under £425,000.

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a transaction tax on property purchases and the actual amount of tax payable is not based on the market value of the property but on the actual purchase price.

At the time of writing, stamp duty is currently payable in England, Wales and Northern Ireland. A different type of tax, Land and Buildings Transaction Tax (LBTT) applies to property purchases in Scotland, and from 1 April 2018 a similar devolved tax, Land Transaction Tax (LTT) will apply in Wales.

Stamp Duty Changes

Governments have made different changes to stamp duty over the years, this is usually done to boost or dampen certain parts of the property market. For example, from April 2016 the government introduced a 3% surcharge on purchases over £40,000 where the property was a second home. This rule was mainly intended to supress the purchase of multiple properties as buy-to-let investments although this did affect people buying holiday homes,

In 2022 the Government’s “Mini Budget” announced the abolition of stamp duty for first-time buyers on homes purchased for up to £425,000, with reduced liability on purchases between £425,001 and £625,000. This came into effect from 23 September 2022, and was designed to directly reduce the cost for young people buying their first property.

The government estimated that the original change to stamp duty in 2017 would help up to around 95% of first-time buyers in England, Wales and Northern Ireland, and the Office of Budgetary Responsibility (OBR) predicts it is likely to result in an additional 3,500 first-time buyers per year. First-time buyers purchasing property for more than £625,000 are not entitled to any relief and will pay stamp duty at the normal rates.

How is stamp duty calculated?

Stamp duty on residential property purchases is charged differently depending on the purchase price. It is charged on a stepped basis and the table below shows the basic stamp duty rates that apply to each bracket for home movers, those buying a second (or subsequent) property, and first-time buyers purchasing a property for over £625,000.

For example, a home mover buying a property for £295,000 would pay:

The next table shows the changes to stamp duty for first-time buyer purchases up to £625,000 from 23 September 2022.  First time buyers purchasing above £625,000 or for any property that is not for their own occupation are not eligible for any reduction and would pay at the normal rates as above.