What is Stamp Duty?

Stamp duty is the tax charged by the government when you buy a home for more than £125,000 in England & Wales. Rates were reduced in December 2014.

Stamp Duty in Scotland is now referred to as the Land and Buildings Transaction Tax (LBTT). See more detail on LBTT.

 

How is it calculated?

In England and Wales, new Stamp Duty rates are paid on as sliding scale based on the property price within each tax band.

Purchase Price

New rates paid on the part of the property price

within each tax band

0 – £125,000

 Zero

£125,001 to £250,000

2%

£250,001 to £925,000

5%

£925,001 to £1.5 million

10%

More than £1.5m

12%

Try our handy Stamp Duty calculator to see how much you could save.


So what does that actually mean…  

 
For 98 per cent* of those who pay Stamp Duty, these new rules mean that you’ll be paying less than before.

… for a property worth £185,000?


You will have to pay £1,200. 

… for a property worth £275,000?

 
Buying a house at this value would see you taxed for £3,750.


… for a property worth £510,000?

 
For a £510,000 home, the total Stamp Duty would be £15,500. 


Why do we have to pay it?

 
When you buy a property the change in land ownership has to be legally registered at the Land Registry. This process requires a certificate from the HMRC – which they will only issue on receipt of the Stamp Duty due on the purchase of the property. So, put simply, if you don't pay the Stamp Duty, you can't buy your new home.  Luckily, you don't have to worry about it as it’s one of the things your solicitor takes care of.



Where did it come from?

 
It’s an ancient tax, first introduced in the UK in 1694 during the reign of William and Mary to raise money for the war against France. Initially, it was a tax or duty on documents that required the Royal seal (or stamp) to be legally valid - documents like the transfer of ownership of land.



How can we pay it for you?

 
Legally, the purchaser has to pay the SDLT on their purchase. However we may be able to pay the Stamp Duty for you – just ask the Sales Adviser at the development. Should you proceed with Barratt Homes' offer, we will send a cheque to your solicitor on completion of the purchase of your new home.

 

 

Based on an average family home in England and Wales costing £275,000.  Source www.gov.uk/government/uploads/system/stampduty.