Stamp Duty Land Tax

(The weekly series - Pocket Money - where I explain financial basics in fewer than 200 words. Feel free to make suggestions!)

Stamp Duty Land Tax (SDLT) is a tax you pay when buying a property in England and Northern Ireland above a certain price threshold. Scotland has an equivalent called the Land and Buildings Transaction Tax (LBTT) and Wales has the Land Transaction Tax (LTT) which have their own thresholds but the principles are the same. 

Like income tax, stamp duty is based on bands which means you pay the higher rate only on the portion that falls within that band, not on the entire purchase price. 

Currently, first time buyers pay no stamp duty on the first £300,000 of a property’s value and then 5% up to £500,000. If the value is over £500,000 then first time buyers pay the same as everybody else. 

Everybody else pays 0% up to £125,000, 2% up to £250,000, 5% up to £925,000, 10% up to £1.5million and 12% above £1.5million. 

You’ll pay an additional 5% for second or further properties. 

It needs to be paid within 14 days of the purchase and in practice the solicitor or conveyancer will likely include that in the completion statement that they prepare, but it’s still your responsibility. 

Love Eleanor. xxx