In England, Northern Ireland and Wales you’re liable to pay Stamp Duty when you buy a residential property that costs more than £125,000. This tax applies to both freehold and leasehold properties. First time buyers are liable to pay Stamp Duty and it doesn’t matter whether you are a cash buyer or buying with the help of the mortgage you will still have to pay the tax.
There are several rate bands for Stamp Duty. The tax is calculated on the part of the property purchase price that falls within each band.
For example, if the purchase price of the property you are buying is £300,000, the Stamp Duty Land Tax (SDLT) you will have to pay is calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £50,000 = £2,500
Total SDLT = £5,000