What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax you must pay to HM Revenue & Customs (HMRC) if you purchase a residential property or land for more than £125,000.
The amount of Stamp Duty you will pay varies based on the property value. The tax is charged at different rates based on the value of the transaction, and rates vary every so often based on government policy changes.
If a property being purchased is valued at £230,000, then based on the current SDLT rate of a 1% charge, £2,300 would be payable to HMRC. for a property purchased for £260,000 the rate is 3%, and therefore £7,800 would be payable.
From 22 March 2012 a new rate of SDLT on residential properties over £2 million was introduced and charged at 7%. Around the same time the SDLT exemption for first time buyers for properties being purchased for less than £250,000 was removed.
Disadvantaged Areas Relief, which applied if a property was in an area designated by the government as 'disadvantaged' was also abolished on 6 April 2013.
If six or more properties are purchased as part of a single transaction the transaction is treated as if were non-residential. The purchase price of all the properties in the transaction are added together and this value determines the SDLT rate to use.