Stamp Duty – everything you need to know

Stamp Duty rates as announced in the mini-budget on 23 September 2022 will remain the same until 31 March 2025. Visit GOV.UK to see the new rates you’ll pay from April 2025Opens in a new window

Stamp Duty is a tax you might have to pay when buying a property or a piece of land. 

You will pay Stamp Duty on residential properties in England and Northern Ireland costing more than £250,000, unless you are a first-time buyer 

This tax applies to both freehold and leasehold properties. It also applies whether you’re buying outright or with a mortgage.  

• If you’re buying a property in Scotland, you’ll pay Land and Buildings Transaction Tax instead of Stamp Duty. 
• If you’re buying a property in Wales, you’ll pay Land Transaction Tax instead of Stamp Duty.

There are several rate bands for Stamp Duty.

The tax is calculated on the part of the property purchase price falling within each band.

You’ll pay Stamp Duty on the purchase of your main property costing more than £250,000, unless you’re a first-time buyer

For example, if you buy a house for £350,000, the Stamp Duty Land Tax you owe is calculated like this:

• 0% on the first £250,000 = £0

• 5% on the amount from £250,001 and £350,000 = £5,000

Total Stamp Duty to pay = £5,000

If you’re buying an additional property such as a second home, you’ll have to pay an additional rate 5% in Stamp Duty on top of the standard rates.

You won’t pay any Stamp Duty if the property costs less than £40,000.

It doesn’t apply to caravans, mobile homes or houseboats.

If you’re a first-time buyer in England or Northern Ireland, you will pay no Stamp Duty on property purchases up to £425,000. This is called ‘first-time buyers’ relief’. 

For properties costing up to £625,000, you will pay no Stamp Duty on the first £425,000. You’ll then pay Stamp Duty at the rate of 5% on the remaining amount, up to £200,000. 

If the property you’re buying is worth over £625,000, you will need to pay the standard rates of Stamp Duty and won’t qualify for first-time buyers’ relief. 

This higher rate of Stamp Duty relief for first time buyers is due to end in April 2025. Visit GOV.UK to see the new rates from AprilOpens in a new window

You are a first-time buyer if:  

• you’re purchasing your only or main residence, and  
  
• you've never owned a freehold or have a leasehold interest in a residential property in the UK or abroad. 
  

If you’ve ever inherited a property (or part of one), you won’t be considered a first-time buyer. 

If you are buying a property with another person, you must both meet the criteria for first-time buyers to get Stamp Duty relief. 

If you’re a non-UK resident buying a residential property in England or Northern Ireland, you might have to pay an additional 2% on top of the existing Stamp Duty rates. This applies to properties costing more than £40,000.

Find out more about rates of Stamp Duty for non-UK residentsOpens in a new window

You have 14 days to submit a Stamp Duty Land Tax (SDLT) return and pay any SDLT due. 

If you don’t submit a return and pay the tax within 14 days, HMRC might charge you penalties and interest. 

Find out more about Stamp Duty penalties and interestOpens in a new window

You will need to submit a Stamp Duty return, even if you’re not paying any SDLT. Usually, your solicitor will submit your return, although you can do it yourself. 

Either way, you’re responsible for making sure it’s all submitted on time. 

You can learn about filing a return and paying Stamp DutyOpens in a new window on GOV.UK.

If you inherit a property you won’t typically have to pay Stamp Duty. This is the case even if you’re taking on an outstanding mortgage. 

You don’t need to submit a Stamp Duty return if you’ve inherited a property in a will. However, you'll need to inform HMRC, and might have to pay inheritance tax. Learn more in our guide to inheritance tax.

You won’t have to pay Stamp Duty if you transfer property to your partner because you’re: 

• legally separating
  
• ending a civil partnership
  
• annulling a marriage, or 
• divorcing. 
  

If this is the case, you don’t need to tell HMRC about the transfer. 

If you are unmarried and not in a civil partnership when transferring a property, you may have to pay Stamp Duty. 

Read more in our guide Protecting your home ownership rights during divorce or dissolution.

If you are giving your property as a gift to someone else, they won’t have to pay Stamp Duty if there’s no outstanding mortgage. 

A gift is different from a transfer, as there is nothing of monetary value being exchanged. This would mean the person receiving the property pays no cash, takes on no part of the mortgage and offers nothing in exchange. 

If you take over some or all of an outstanding mortgage, you might have to pay Stamp Duty on the value of the mortgage. 

If you transfer all or part of a property to someone else, there might be Stamp Duty to pay. 

You will need to pay Stamp Duty if you are:  

• exchanging anything of monetary value for the transfer of a property, or  
  
• if you are transferring equity on a mortgage. 
  

Stamp Duty rates are the same for transferring ownership as they are for buying a property, but how they are calculated is different.

If you’re giving anything of monetary value in exchange for the transfer of all or part of a property, you may need to pay Stamp Duty. 

Whether you pay will depend on the ‘chargeable consideration’. This is the overall price paid for a property, and it can include: 

• cash payments
  
• the liability of all or part of the outstanding mortgage 
  
• any fixtures or fittings 
  
• any legal fees
  
• any other assets transferred as part of the deal. 
  

You’ll pay Stamp Duty for the overall chargeable consideration at the same rates as you would for buying a property. This also includes additional rates if this is a second property or buy-to-let.

Transferring equity normally happens when someone is added to or released from a mortgage. Stamp Duty might need to be paid depending on: 

• the amount left on the mortgage 
• the value of the equity being transferred 
• anything being exchanged for the equity. 

If the overall chargeable consideration falls below the Stamp Duty threshold, you won’t need to pay. For example: 

• A house is valued at £200,000, with £100,000 outstanding on the mortgage and £100,000 in equity. 
• The owner agrees to an equal split of the property with their partner. 
• The person taking ownership pays them £50,000 for the other half of the £100,000 equity left in the property. 
• That person also becomes responsible for the other half of the remaining mortgage, which is £50,000. 

In this situation the chargeable consideration is £100,000, so the new owner would not need to pay Stamp Duty unless this is their second home. 

In another example: 

• The owner of a property worth £700,000 has £600,000 left on their mortgage. 
• They get married and transfer half of the property to their partner. 
• Their partner now has £50,000 in equity, and is responsible for £300,000 of the mortgage. 

The partner has a chargeable consideration of £350,000. They will pay £5,000 in Stamp Duty (0% of the first £250,000 and 5% of £100,000). 

You might choose not to split the equity. In this case, you’d only pay Stamp Duty on the value of the outstanding mortgage being transferred. 

If a property is split unequally, the person with the larger share might compensate the other. Stamp Duty is paid on this compensation if it’s above the threshold.

However, if one owner decides not to compensate the other, or it’s given as a gift, there is no Stamp Duty to pay.