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20 October 2021

What is Stamp Duty?

Are you purchasing a residential property (or a piece of land) in England or Northern Ireland worth over £125,000? Then you’ll need to know about Stamp Duty is. Read on to find out more….

Stamp Duty Tax

Stamp Duty is a tax that is applied to the purchase of a residential home or land. It applies in most circumstances including whether you are a cash buyer or planning to use a mortgage, or if the property is leasehold or freehold. Even first-time buyers are charged Stamp Duty tax so it’s important to factor this in with all of the other fees associated with buying your first home.

During the pandemic, the Stamp Duty tax bracket’s were changed to encourage the housing market to stay afloat during a time when the economy was struggling. Now we’re back to a new normal, Stamp Duty has returned to its normal rates.

So what can you expect to pay?

There are a lot of stamp duty calculators online you can use including this one by the Money Advice Service.

The amount of stamp duty is calculated as a percentage of the price you are paying for your property as shown in the table below:

 

What about if I’m a first-time buyer?

First-time buyers do not have to pay stamp duty on properties below £300,000. If you’re buying a new home over this amount, but up to £500,000, you’ll only pay stamp duty on the first £300,00 and then pay stamp duty at the relevant rate of 5% on the remaining amount up to £200,000. If you’re buying a property worth over £500,000 you’ll have to pay the standard rates of stamp duty and won’t qualify for first-time buyer’s relief.

Need more advice?

Navigating the buying process can be a stressful experience with a lot to learn about the many steps needed. Our sales team are on hand to help. For more information on the whole purchasing process, why not take a look at our ‘Guide to buying a new build home’ which you can download here.

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