If you are in the process of buying a property, you will need to think about the additional costs that you will face. As well as having to consider the overall cost of the property, you will need to factor in the cost of Stamp Duty.
Understanding Stamp Duty
If you are buying a residential property in England or Northern Ireland costing more than £125,000, you will need to pay Stamp Duty. Stamp Duty is the legal recognition of the purchase being made and, if the property is costing you more than £125,000, it cannot usually be avoided. Think of it as a tax that you have to pay as part of buying a home. The only buyers who do avoid paying Stamp Duty are first time buyers. If you are a first time property buyer in England or Northern Ireland, you are not required to pay Stamp Duty on the first £300,000 of a property purchase price. If you are buying a second home, Stamp Duty is payable on all properties costing more than £40,000 and an additional 3% is required on top of the standard rate band.
The amount of Stamp Duty that you are liable to pay will depend on the exact cost of the property and the rate band that it falls into. There are a few different Stamp Duty rate bands and it is calculated based on the amount of the property price that falls within each of these bands. As Stamp Duty is calculated as a percentage of the property cost, it’s different for everyone. For example, properties costing between £125,001 and £250,000 fall into the rate band of 3%. Those costing between £250,001 and £925,000 fall into the rate band of 5%, and so on.
How to Calculate Stamp Duty
With so many different rate bands and percentages to consider, calculating Stamp Duty is rarely easy. There are a lot of things to take into account and it’s not always easy to work out what needs to be paid. To help you out, we have created a Stamp Duty calculator. By entering the purchase price of the property, you can find out how much Stamp Duty you will be liable to pay.
To find out more about Stamp Duty and to quickly find out how much you will be paying, use our online Stamp Duty calculator.