Buying a house? It's not just about your deposit and mortgage repayments, there are quite a few costs to consider –with Stamp Duty often one of the biggest. Here's what you need to know condensed to just 300 words.
How Stamp Duty is calculated
When you buy a property that costs more than £125,000 in England, Wales or Northern Ireland you're charged Stamp Duty Land Tax. How much you pay is tiered, rising as the house gets more expensive.
There's nothing to pay on the first £125,000. But you have to pay 2% Stamp Duty for the next £125,000.
If the house costs more than £250,001, you get charged 5% on the value over this amount up to £925,000.
Stamp Duty jumps to 10% on property between (25,001 and £1.5 million, and for anything over that you'll be charged 15%.
So for example, a property that costs £300,000 would be charged Stamp Duty as follows:
First tier – £0 in Stamp Duty (0% on first £125,000)
Second tier- £2,500 in Stamp Duty (2% of the second £125,000)
Third tier - £2,500 in Stamp Duty (5% of £50,000)
So the total Stamp Duty due would be £5,000.
If you've already got a home
Anyone who's already got a property – or is married to someone who has – is charged an extra 3% on each tier. So in the example above, the total Stamp Duty cost would be £14,000.
How to pay it
You've got 30 days after completing to submit your Stamp Duty return and pay what you owe. You need to do this even if your home costs less than £125,000.
It's different in Scotland
You don't pay Stamp Duty in Scotland. Instead you are charged for the Lands and Buildings Transaction Tax – if the home costs more than £145,000.
Again, there are tiers here. If you home costs between £145,000 and £250,000 you're charged 2%; for the value between £250,001 and £325,000 it's 5%; for the next batch up to £750,000 it's 10%; and 12% for anything more than that.
This article is provided by the Money Advice Service.