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

If you buy an additional residential property, for example a buy-to-let property you will have to pay an extra 3% in Stamp Duty on top of current rates for each band. This increased rate applies to properties bought for £40,000 or more. If you do not own any other residential property but your spouse does you will still be liable to pay the higher rate tax. You will have to pay the higher rate even if the property you currently own is overseas.

If you buy a new main residence but there’s a delay in selling your previous main residence, you’ll have to pay the higher Stamp Duty rates as you’ll now own two properties. You can request a refund for the amount above the normal Stamp Duty rates if:

  • You sell your previous main residence within three years, and
  • You claim the refund within three months of the sale of your previous main residence.

BHW quotes will include the Stamp Duty payable based on your purchase price and whether you own any other property. Once we hold sufficient funds, we will pay the Stamp Duty and submit all necessary forms on your behalf on completion.

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