Everything You Need to Know About Stamp Duty

Ordinarily, Stamp Duty Land Tax (SDLT) must be paid when property or land is purchased above a certain price in England, Wales and Northern Ireland. A reduction in the levels of SDLT was introduced, however, in July 2020 in order to provide relief for buyers who suffered a loss of income during the COVID-19 pandemic and to boost a property market negatively affected by lockdown restrictions.

stamp duty

In March of this year, Chancellor Rishi Sunak declared a three month extension to the stamp duty holiday. The tax break on the first £500,000 of the sale price will come to an end on the 30th  June. In a move to “smooth the transition back to normal”, the threshold above which the property purchase tax is payable is now set at £250,000 until the end of September. This is double the standard threshold of £125,000.

In the rush for mortgages and completion of their purchases, many homebuyers found they could not meet the 30 June deadline. But for the time being homebuyers are still able to take advantage of the higher stamp duty threshold of £250,000.  There is a continuing additional help for first-time buyers as well.

What Stamp Duty Will You Have to Pay on Your Property?

  • From July 1st, first-time buyers buying a house for £500,000 or less will not have to pay stamp duty on the first £300,000  of the purchase price.  They will pay SDLT at 5% of any part of the price above £300,00.  These rates only apply provided every purchaser of the property is a first-time buyer.
  • Non-first-time buyers will not have to pay stamp duty on properties costing £250,000 or less from July 1st to September 30th and will not have to pay stamp duty on properties costing £125,000 or less from October 1st
  • Buyers purchasing a second property or a property on a buy-to-let basis, will benefit from the various raised tax thresholds, but will still have to pay the usual 3% surcharge which applies to second homes. The surcharge can be recovered from HMRC if the previously-owned property is sold within 3 years, and the property which attracted the surcharge becomes the buyer’s main residence.

How To Pay Stamp Duty

You only have to pay stamp duty once your purchase completes. Your solicitor will typically file a stamp duty return and make any payment that is due on your behalf, although you can do this yourself. Either way, it is your responsibility to ensure that the various documents are submitted on time, and you are liable to a penalty if the SDLT is not paid within 14 days after the purchase to which it relates. SDLT must be paid before you can apply to register the purchase at HM Land Registry.

If you require assistance with paying SDLT or any other part of the conveyancing process, our specialist solicitors would be more than happy to take your enquiry.