We have had a couple of confused buyers recently so we thought we'd put together a helpful blog about the current stamp duty guidelines. Its true - stamp duty has got a little bit more complicated over the last few years but don't panic! We are going to try and make this as simple as possible so that you know exactly where you stand when it comes to
A) whether or not you have to pay it, and
B) if you do - how much will you have to pay?

Firstly, its important to establish which one is applicable to you...

IF YOU ARE A FIRST TIME BUYER...
You can claim a discount (relief) so you don’t pay any tax up to £300,000 and 5% on the portion from £300,001 to £500,000.
NB: You’re only eligible if you, and anyone else you’re buying with, are first-time buyers
If the price is over £500,000, you follow the rules for people who’ve bought a home before.

IF YOU HAVE BOUGHT A PROPERTY BEFORE...
This is where is can get complicated - where it has been made easier for first time buyers to get on the property ladder, it has got a little bit more complicated if you have owned a property before.

SDLT RATES
Zero - Up to £125,000
2% - The next £125,000 (the portion from £125,001 to £250,000)
5% - The next £675,000 (the portion from £250,001 to £925,000)
10% - The next £575,000 (the portion from £925,001 to £1.5 million)
12% - The remaining amount (the portion above £1.5 million)

Example: If you buy a house for £275,000, the SDLT you owe is calculated as follows:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £25,000 = £1,250
Total SDLT = £3,750

IF YOU ARE BUYING AN ADDITIONAL PROPERTY...
You’ll usually have to pay 3% on top of the normal SDLT rates if buying a new residential property means you’ll own more than one.

Use the SDLT calculator to work out how much tax you’ll pay.

NB: You may not have to pay the higher rates if you exchanged contracts before 26 November 2015.

IF YOU ARE REPLACING YOUR MAIN RESIDENCE...
You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.
NB: If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase:
You’ll have to pay higher rates because you own 2 properties
You may be able to get a refund if you sell your previous main home within 36 months

There are special rules if you own property with someone else or already own a property outside England, Wales and Northern Ireland.

SPECIAL RATES...
There are different SDLT rules and rate calculations for:
  • Corporate bodies
  • People buying 6 or more residential properties in one transaction
  • Shared ownership properties
  • Multiple purchases or transfers between the same buyer and seller (‘linked purchases’)
  • Purchases that mean you own more than one property
  • companies and trusts buying residential property