Stamp Duty Guide

Stamp Duty, or Stamp Duty Land Tax to give it its full name, must be paid when you buy a property or land over a certain price in England and Northern Ireland.

In July, Chancellor Rishi Sunak temporarily raised the stamp duty threshold for residential properties from £125,000 to £500,000 in an effort to boost the wider economy by giving the housing market a shot in the arm.

This means that for most buyers, properties up to the value of £500,000 currently attract no stamp duty liability – and won’t until end of June 2021, when the threshold reverts back to £125,000.

If you’ve never owned a property before…

As a first-time buyer, you’ll still qualify for stamp duty relief when the rates change at the end of June. So, it doesn’t matter if you plan to live in the property or rent it out; you’ll enjoy the same rates as any other first-time buyer.

For clarity, the first-time buyer stamp duty rates until 1st April 2021 are as follows:

Up to £500,000

zero

The portion from £500,001 to £925,000

5%

The portion from £925,001to £1.5m

10%

The portion above £1.5m

12%

After 1st April 2021, when the threshold for most buyers reverts to £125,000, first time buyers still benefit from a much higher threshold. For clarity, the rates are as follows:

Up to £300,000

zero

The portion from £300,001 to £500,000

5%

If the price is over £500,000, the stamp duty rules are the same as for people who’ve bought a home before.

If you’re already a homeowner…

If you already own a home and are buying another, either as a buy-to-let investment property or second home, you will still benefit from the stamp duty holiday in terms of threshold.

However, you will have to pay a 3% surcharge on any purchase over £40,000, even if it is your first buy-to-let property.

The stamp duty rates until 1st April 2021 on second homes are therefore as follows:

Up to £500,000

3%

The portion from £500,001 to £925,000

8%

The portion from £925,001 to £1.5m

13%

The portion above £1.5m

15%

The stamp duty rates from 1st April 2021 on second homes are as follows:

Up to £125,000

3%

The portion from £125,001 to £250,000

5%

The portion from £250,001 to £925,000

8%

The portion from £925,001 to £1.5m

13%

The portion above £1.5m

15%

Any search engine will quickly take you to a stamp duty calculator, where you can easily enter your details and find out exactly how much tax you would have to pay on the type of property you are interested in buying. It’s really straightforward.

Look before you leap

In most cases, stamp duty will not be the overriding concern when considering a property.

Even in these uncertain times, property remains a tangible asset and an attractive purchase to invest in, especially given the historically strong and resilient UK property market.

So, don’t be licked by stamp duty. Do your sums - and go in with your eyes wide open. Take a look at the properties below, we have rounded-up six of our favourite properties under £500,000 for you to check out.

Teddington, TW11 | £485,000

A two double bedroom first floor mansion apartment, located centrally on Teddington High Street. This apartment boasts a number of period features including an exposed brick wall and a feature fireplace. The South West suburb of Teddington has a lively community feel, with an abundance of local shops, restaurants and bars to choose from, and the train station provides direct trains into Waterloo, perfect for getting into central London.

Southam, Warwickshire | £385,000

A beautiful double fronted three bedroom character stone cottage, located in the popular village of Fenny Compton, to the North of Banbury. The property boasts an abundance of character and charm, but has been modernised so is ready to move straight into. This lovely home also has both a front and a back garden, perfect for barbequing with friends or just whiling away the English summer.

City of London, E1 | £450,000

Never thought you would be able to afford to buy a home with a view over the city (including a brilliant view of the shard)? Well here it is for under £500,000, a high spec studio flat, perfect for a first time buyer, or a pied-a-terre in the city. Located just around the corner from the Tower of London and St Katharines Docks, this apartment is perfect for getting wherever you need to be in the capital. The building also includes a concierge, swimming pool, gym, games room, cinema and roof terrace for residents use, what more could you want?

Chesham, Buckinghamshire | £375,000

This new build three bedroom duplex house in the heart of Chesham, could be the perfect first home for a young couple or a growing family. Located in Buckinghamshire, this small development is close to some of the countries finest schools and has excellent transport links, with many options for getting directly into London. The thriving market town of Chesham also has much to offer with a local market, plenty of green space and a variety of restaurants and cafes.

Fulham, SW6 | £475,000

A one bedroom flat, in a new build development comprising a total of just nine one and two bedroom apartments, perfect for any young professional. Located in Fulham, Toy Makers Yard is perfectly placed, with a wide selection of eateries, pubs and bars close by. And, with both underground stations and train stations on the door step you can be wherever you need to be quickly.

Guinea Street, Bristol | £325,000

If you still want to live in a city, but London isn’t for you, what about Bristol? This one bedroom apartment has been lovingly maintained and provides a mixture of charm and character features. The apartment is located in The General, which is an historic listed former hospital, the development also boasts a concierge service, a private gym and a Michelin star restaurant.