Stamp DutyWhat is Stamp Duty and when must you pay it?

Overall, Stamp Duty is a tax that applies when you purchase a property or shares. This is split into Stamp Duty Land Tax, which is payable when you purchase a property over a certain value, and Stamp Duty Reserve Tax which usually applies when you buy shares. For the purposes of this explanation, 'Stamp Duty'; refers purely to the Stamp Duty Land Tax that you pay when buying a property. If you buy a property that costs more than £125,000, you must pay a Stamp Duty tax, which is calculated as a percentage of the total purchase price. This increases depending on the value of the property from 1-4%, so if the purchase price is between £125,001 and £250,000 you pay an extra 1% in Stamp Duty, if it is between £250,001 and £500,000, an extra 3%, and an extra 4% if the property costs over £500,000. If the property has a purchase price of £125,000 or less, you are exempt from paying Stamp Duty on the property. More info

Between September 2008 and December 2009, the starting threshold for Stamp Duty eligibility was raised by the government to £175,000 to encourage new house purchases. However, it was reduced back to £125,000 from the 1st January. There are some exceptions to these Stamp Duty brackets. If you buy a property in an area that has been designated by the government as a 'disadvantaged' area, the starting threshold for Stamp Duty is £150,000. Also, if you buy a zero-carbon home (built using high-quality insulation and using renewable energy techniques), it is exempt from Stamp Duty if the purchase price is under £500,000. If it is bought for more than this, the total Stamp Duty bill is reduced by £15,000. In a house sale, the buyer of a property is always responsible for paying the Stamp Duty, and the transaction is usually handled by the conveyance that you hire to take care of the legal aspects of the sale. Less