Stamp Duty: What you need to know

There are many costs associated with buying a property. Whether it's the solicitor's fees, ordering a survey, booking a removals firm or any of items on the seemingly endless list of costs, there always appears to be something targeting your budget.

One of the necessary bills that will need to be paid to HM Revenue & Customs is the stamp duty (known formally as the Stamp Duty Land Tax (SDLT) in England and the Land Transaction Tax (LTT) in Wales).

The way that it is calculated is sometimes unclear to many homebuyers, while there are items in the news suggesting that it's all likely to change anyway.

As of September 2022, when the Government made their last adjustments to the process, the stamp duty for England is calculated as follows:

For example, if you were to purchase a house priced at £930,000 (the large number chosen for expressing the detail), you would have to pay the following amount:

You should be aware that there are different (and higher) rates to pay if this your second (or more) home that you're buying.

There are also schemes to help first-time buyers or replacing a main residence.

For the purchase of Welsh properties, the rates of tax and the bandings are slightly different, but the process follows the same construction to create the figure payable:

The Government have confirmed that the stamp duty thresholds for England will be changing on 31 March 2025, with the difference as follows:

This isn't a major change on the face of it with the inclusion of a fifth band. However, it's worth doing an exercise to see what the differences would be between the two tax schemes.

This calculation is based on the figures published by Zoopla in their August House Price Index, covering data for the previous month, July.

Source: Zoopla

As you can see, more properties are likely to fall into the lower bands, with stamp duty generally resulting in higher bills. It might be more equitable in the housing market, and it might put some potential purchasers off because of the amount, but, if you want to go ahead with buying a home in the spring and beyond of next year, you need to be aware of the necessary costs connected with stamp duty.

Another note of caution: this is the position currently and, so far, the plans haven't changed. But, with the change of political colour at the UK home last July, and the public finances ‘black hole', there may yet be further changes coming along. In addition, those changes may be brought forward to assist with the Budget.

Assuming the plans remain the same until the end of the current tax year, those of you worrying about whether you can take advantage of the current stamp duty banding in England, remember that the average time from listing to completion is around 25 weeks (Zoopla), so will fit neatly into the current timescales if you get your plans in place within the next two months!

Need a focused conveyancing solicitor, who will perform a high-quality job at a value-for-money price, and who will make every effort to drive your planned purchase onwards?

That's where you can rely on the experts at Homeward Legal! 

They will start work on your planned purchase as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process.

There are some unforeseen items that might arise during the purchase and/or sale, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.