What is the threshold for stamp duty on houses in the UK?


When a home is purchased above a certain price, it will attract stamp duty. This is an additional expense which will need to be taken into consideration when stepping on to the property ladder – particularly if you’re saving up for a deposit and need to carefully plan your budget.

The rules surrounding stamp duty are complicated. It depends on whereabouts in the United Kingdom you’re planning to buy, the eventual selling price, whether or not you are a first-time buyer, or how many other properties you own already. So, just what is the threshold for stamp duty on houses in the UK?

Stamp duty explained

Stamp duty – or stamp duty land tax to give its full name in England and Northern Ireland – is a lump sum tax that is applied when a property price rises above the threshold prescribed by the Government.

It works on a sliding scale, with tax paid at increasing proportions of the price. The good news is that, under current legislation, there is no stamp duty to pay if you purchase a property below £125,000.

How does the threshold for stamp duty work in England and Northern Ireland?

For the first£125,000 of a purchase price, buyers do not have to pay any stamp duty.However, a 2% charge is applied on the next £125,000 for house sales that cost between £125,001 and £250,000. A further 5% stamp duty will be applied to the next £675,000(on the portion between £250,001 and £925,000).

For instance, in the following example provided by the Government, if a house is purchased for £275,000, there will be no tax due on the first £125,000.A 2% duty will be applied to the next £125,000 (which works out at £2,500).Finally, 5% will be charged on the remaining £25,000 (so £1,250), giving a total of £3,750 payable in stamp duty.

Wales maintains separate control over its own Land Transaction Tax, which is applicable to properties worth more than £180,000.Meanwhile, Scotland is also governed by slightly different rules, with varying thresholds for existing property owners and first-time buyers.

It is worth noting that every region in the United Kingdom imposes a 3% surcharge on second homes and buy-to-let properties.

First-time buyers and stamp duty

In England and Northern Ireland, if you are a first-time buyer, the stamp duty threshold is set higher – meaning you will pay nothing on the first £300,000, instead of the lower point of £125,000. You will then pay only 5% on the portion between £300,000 and £500,000.

For any aspect of conveyancing please contact Anthony Stockton Solicitors by calling 0330 055 37 37.

All details and figures referenced in this article are correct at the time of publishing.