If you are buying a property or piece of land in England or Northern Ireland costing you £125,000, you will be required to pay Stamp Duty Land Tax inline with your purchase. Here at North East Property Investment, we have created our commercial property Stamp Duty calculator to guide you through the maze of Stamp Duty, help you work out how much Stamp Duty you will have to pay on your purchase, and how Stamp Duty can be paid. Use the tax calculator below to find out the interest rates:

What is Stamp Duty?

Most people buying or selling property in England would have heard of the term Stamp Duty, and they may have heard people talking about it but with no knowledge of what stamp duty is.

Stamp Duty is a single lump-sum tax that anyone buying a property or piece of land costing more than £125,000 must pay on their original purchase. The amount of tax paid on a property purchase is tiered, meaning that you pay different rates on different portions of the property price.

Stamp Duty Land Tax is not limited to a single property purchase, it is applicable for both residential or commercial properties and applies to both freehold and leasehold properties.

If you are buying property or land elsewhere in the UK, you will have to pay variations in Stamp Duty specific that region of the UK:

History of Stamp Duty Levy

Historically, in 2014 major changes were implemented as the old system was considered to be a ‘slab tax’ whereby rates were incremented at each SDLT threshold and applied to a whole property purchase.  Since then, it has become a progressive tax with rate increases applied between specific stamp duty thresholds.  In 2017, further changes came with the introduction of First Time Buyer relief.  A stamp duty holiday was introduced in July 2020 and ended in June 2021. At this point, a further stamp duty transition period ran from July 2021 until September 2021 and during this time period the initial zero rate threshold was set at £250,000  Since 1st October 2021 stamp duty rates and thresholds have reverted to those in place before the stamp duty holiday.

Stamp Duty Rates

Residential or Home Mover Stamp Duty Rates

These are the following Residential or Home Mover rates you will pay, if you buy a property you are planning to live in (and you’ve owned a property before):

Portion of Property Price % to Pay
£0 – £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1.5 million 10%
£1.5 million + 12%

First Time Buyer Stamp Duty Rates

November 2017 saw further reform to stamp duty rates. People buying their first home for under £300,000 do not need to pay any stamp duty on their property.

For first time buyers purchasing properties between £300,001 and £500,000, they will only have to pay stamp duty from £300,001 (up to £500,000).

For properties that have been purchased from >£500,000 will pay stamp duty at the standard homeowner’s rate.

Portion of Property Price
£0 – £500,000
% to Pay Portion of Property Price
£500,000 +
% to Pay
£0 – £300,000 0% £0 – £125,000 0%
£300,001 – £500,000 5% £125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1.5 million 10%
£1.5 million + 12%

Buy to Let Stamp Duty Rates

Buy-to-let stamp duty rates are not solely for buy to let properties, included are second homes or additional property, holiday homes or buy-to-let properties. These rates are applicable unless you are a first-time buyer or purchasing a property <£40,000.

Any property that will be your primary residence will have a 3% premium on standard homeowners or residential stamp duty rates.

Portion of Property Price % to Pay
£0 – £125,000 3%
£125,001 – £250,000 5%
£250,001 – £925,000 8%
£925,001 – £1.5 million 13%
£1.5 million + 15%

The stamp duty rates provided are rates from 2019. These may be subject to change with the publication of the budget by the Chancellor of the Exchequer on Wednesday 11 March 2020

Stamp Duty Holiday

In an attempt to kick the property market back into action, the Chancellor Rishi Sunak announced a comprehensive set of economic measures to boost spending in the property and promote broader economic growth. Included in this announcement was the decision to temporary adjust the current stamp duty rates buyers have to pay on the completion of a property transaction. This announcement saw the minimum threshold at which people pay stamp duty to £500,000.

The sudden announcement to increase the minimum threshold to £500,000 has come in with immediate effect and is currently planned to stay until the 31st March 2021. So, what has changed?

For those unaware, stamp duty is a tax paid by the buyer when a sale of a property is completed. The amount of tax paid on completion of a property is calculated as a percentage of the final sale price depending on what threshold is reached.  The announcement of the stamp duty holiday has raised the minimum point that buyers have to pay tax on from £125,000 to £500,000 until 31st March 2021. Therefore, anyone completing a purchase up to this price will not pay any stamp duty during the next eight months.

Stamp Duty Rates July 2020 – 31st March 2021

Listed below are the rates for first-homes or main residential properties:

Property Value Existing Rates Holiday Rates
£100,00 0 0
£200,000 £1500 0
£300,000 £5,000 0
£400,000 £10,00 0
£500,000 £15,000 0
£600,000 £20,000 £5,000
£700,000 £25,000 £10,000
£800,000 £30,000 £15,000
£900,000 £35,000 £20,000
£1million £43,750 £28,750.

Listed below are the adjusted rates for an additional property or buy-to-let properties.

Property Purchase Price Stamp Duty Rates
£0 – £500,000 3%
£501,0000 – £925,000 8%
£925,001 – £1.5million 13%
£1.5million+ 15%

The Stamp Duty holiday also applies to buy-to-let and second home purchases, but landlords and investors will still have pay the 3% surcharge at all levels of purchase, including those below £500,000

in a habitable state and must contain certain facilities ie kitchen/cooking area, toilet, bathroom, suitable for living in comfort.  It must also be seperable from main dwelling with separate utilities and individually isolated.

When and How to Pay Stamp Duty?

With regards to the payment of stamp duty, historically it was set at 30 days, but since March 2019 you will have 14 days from the date of completion to pay this.  Not doing so, may result in a fine.  Using a solicitor, agent or conveyancer this is usually taken care of as they will pay the stamp duty on day of completion and file the return for you.  Bear in mind, they may also charge you for this. If a return is not submitted within the 14-day window, HMRC can charge penalties and interest on the amount due.

How to Pay

This will usually be taken care of by your solicitor and any payment due, however, you can do it yourself if you prefer. Although this is normally dealt with by your solicitor, you are responsible for making sure it is submitted in the correct time frame.

Note: Even if the price of your property is under £125,000, a return must still be submitted to HMRC, even though you will not need to pay.

To find out about filing a return and paying Stamp Duty, click here.

Are there any Stamp Duty Exemptions?

Exemption legislation is complex and there are over 40 exemptions which can be obscure, so we always advise to seek an expert rather than trying to sort it for yourself.

What about investment property and development?

In 2011, Multiple Dwelling Relief was brought in to encourage investment in property and development.  This is to encourage the construction of more residential properties.  The amount of tax payable is calculated by finding the average value of all the dwellings related to the transaction.  This allows some relief on every dwelling rather than a lump sum on the whole transaction.

In regards to Multiple Dwelling Relief, the HMRC defines this as a property that is in a habitable state and must contain certain facilities ie kitchen/cooking area, toilet, bathroom, suitable for living in comfort.  It must also be seperable from main dwelling with separate utilities and individually isolated.

What advice can North East Property Investment give me?

Here at North East Property Investment, we are specialists in the buy to let market in the North East of England. With an extensive knowledge of the property market and over 15 years of property management we can provide an in-depth service if you require any extra information.

Contact Us

North East Property Investment Ltd
11 Riverside Studios
Amethyst Rd
Newcastle Upon Tyne
Tyne and Wear

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