Stamp Duty

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Stamp duty originated in the 17th century when duty stamps could be purchased and attached to a transactional document to prove that any tax due on the transaction had been paid. Today, tax relating to the purchase of land is known as “Stamp Duty”, or, more correctly Stamp Duty Land Tax (SDLT) for property.

There has in the past been some confusion as to whether the rate bands are applied once on the whole amount or incremental, ie escalating rates on successive portions. The latter is the case, and for the sake of clarity the following is the current banding table for most residential properties in England, Wales and Northern Ireland:

A property costing up to £125,000 – nil

The portion of the purchase price between £125,000 and £250,000 – 2% (up to £2,500)

Plus the portion of the purchase price between £250,000 and £925,000 – 5% (up to £33,750)

Plus the portion of the purchase price between £925,000 and £1.5m – 10% (up to £57,500)

Plus the portion of the purchase price over £1.5m – 12%

Please note that if you are buying an investment property or second home, an additional 3% SDLT on the purchase price must also be applied to any purchase.

Firs time buyers are exempt from SDLT on purchases up to £300,000, and they pay 5% on any portion of a purchase between £300,001 and £500,000.

So buyers of a property costing eg £375,000 would pay £8,750 (£0+£2,500+£6,250). You can find an SDLT calculator at http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm

The above will cover most situations, but there are certain exceptions and reliefs, so it’s worth taking professional advice in relation to your own specific situation.

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George Tatham-Losh

Since forming the business in 2009, our founder, George Tatham-Losh, has become highly regarded as the local go to expert for advice on maximising property values and getting the most out of property investments, regularly speaking at events and holding well attended seminars. Born and raised in Cheltenham, George knows the town and County like no other and knows what works in the area. Alongside George is a specialist team of agents with a wealth of experience to help you sell, buy, let or rent property in Gloucestershire.

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