Tax on buying property

If you buy a property in the UK over a certain purchase price you have to pay Stamp Duty Land Tax (previously known as Stamp Duty). This is charged on all purchases of houses, flats and other land and buildings.

Stamp Duty Land Tax

Stamp Duty Land Tax replaced Stamp Duty in December 2003 and is a tax on the documents that transfer ownership of a property. When you buy a property you may have to pay Stamp Duty Land Tax.

Paying Stamp Duty Land Tax

You don't have to pay any Stamp Duty Land Tax on residential property costing 125,000 or less (effective 23 March 2006). Above this amount you pay between one and four per cent of the purchase price.     

The table below gives you an idea

Purchase price of residential property Rate of Stamp Duty Land Tax (percentage of the total purchase price)
0 - 125,000 0%
125,001 - 250,000 1%
250,001 - 500,000 3%
500,001 or more 4%

You can check current rates of Stamp Duty Land Tax on the HMRC website.

Stamp Duty Land Tax exemption in 'disadvantaged areas'

Certain areas, known as 'disadvantaged areas', have special Stamp Duty Land Tax treatment. There are around 2,000 of these areas in the UK.    You do not have to pay any Stamp Duty Land Tax if all of the following apply to the property you are buying:
  • it is in a designated 'disadvantaged area'
  • it is residential
  • the purchase price is 150,000 or less

Paperwork

As the buyer of the property, you are responsible for completing the land transaction return and paying the Stamp Duty Land Tax.