How Much Stamp Duty Do I Have To pay?

Written by The Landlord on 15 Jan 2007

The amount of Stamp Duty you pay depends on the purchase price of the property. The rates can change, as they have done over the years, reflecting the condition of the market. In recent years, rates have been lowered and margins have changed to help first-time buyers. As it stands, these are the current rates:

Stamp Duty costs for UK Houses:

Purchase price of property	Payable Stamp duty	Payable Stamp duty for first-time buyers
Up to £175,000	0%	0%
£125,001 – £250,000	1%	0%
£250,001 – £500,000	4%	4%
£500,001 – £1 million	4%	4%
£1 million or more	5%	5%

Avoiding stamp duty

Yes, any property purchased for underr £175k is excluded from Stamp Duty Tax- an amount which is actually below the average price of a house in the UK. Trends show that homebuyers are extending their homes, not buying a bigger one, just so avoid paying a massive stamp duty bill.

It’s not actually legit, but it’s been known for some buyers to cut a deal with the sellers to help reduce, or even completely exclude Stamp Duty costs. For example, If a property is selling for £177k, then the buyer is liable to pay a 1% (£1770) Stamp Duty fee. However, the buyer could negotiate with the seller to make a public and legal sale of £170k, and then give the extra £7,300 (extra £300 tip) under the table. That way the buyer is excluded from Stamp Duty. Of course, the same theory applies with any property in any Stamp Duty percentile. As I said, it’s not legit, and I’m not encouraging such actions. I’m merely recycling what I have heard :)

Stamp Duty in Disadvantaged Areas Relief

If you buy property in an area seen as a ‘disadvantaged’ area, then you may qualify for Disadvantaged Areas Relief. The government will determine whether an area is seen as disadvantaged.

In this case, the 0% threshold is moved up to £150,000, as opposed to £175,000. If you are a first-time buyer you don’t need to apply as the threshold for first-time buyers is higher.

Zero-carbon homes Stamp Duty Relief

There is a relief from Stamp Duty for zero-carbon homes. All qualifying houses under £500,000 are exempt and houses bought for £500,000 or above will have their Stamp Duty bill reduced by £15,000.

Here’s more details from the HMRC website on Stamp Duty Tax relief .

2 Comments - join the conversation...