Checked by Connor Fitzgerald, Founding Director
“Do I need to pay stamp duty?”
This is one of our Yeovil mortgage advisors’ most asked questions when helping first time buyers and those moving homes obtain their mortgages. At The Levels Financial, we know that purchasing your new home is an exciting time, which is why we always want to ensure that you have all the necessary information to make an informed decision.
Read on to find out more about what stamp duty is, if you have to pay it and when.
It is always the home buyer who pays the stamp duty fee, which your solicitor will often do on your behalf. However, there are some cases where you will not need to pay stamp duty, including:
In England & Northern Ireland:
For more information, or to find out how much stamp duty you may need to pay, head to our stamp duty calculator.
Stamp duty is a land tax that the majority of homeowners have to pay when purchasing a property in the UK. Stamp duties were originally introduced to raise finances for the war against France in 1694. However, since its introduction, it has been proven to be a successful way of raising revenue for the UK Government.
Depending on your home buyer status (whether you’re a first time buyer, moving homes, or purchasing additional properties for buy to rent purposes) and the value of the property, stamp duty will differ.
As of the 23rd of September 2022 the stamp duty rates in England and Northern Ireland are the following:
| Property Purchase Price | Stamp Duty Rate | Stamp Duty Rate For Additional Properties |
|---|---|---|
| Up to £250,000 | 0% | 3% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5million | 10% | 13% |
| £1.5million + | 12% | 15% |
Please note that stamp duty is set to change from April 2025, as mentioned in the Governments 2022 Autumn Budget.
If you don’t fall within the exemption brackets for stamp duty, it must be paid within 14 days of completion, otherwise, you could incur a penalty. Penalties will differ depending on the property purchase price, and the length of time you wait to pay stamp duty.
As it is a cost that you must pay, here at The Levels Financial, we recommend that you budget your stamp duty cost within your budget, similar to budgeting in financial advice fees and any estate agent fees you may have to pay if you’re selling your property to purchase a new one.
| Lateness Of Stamp Duty Payment | Stamp Duty Penalty Amount |
|---|---|
| Up to 12-month payment delay | 10% of stamp duty (capped at £300) |
| 12 to 24 months payment delay | 20% of stamp duty |
| Over 24-months payment delay | 30% of stamp duty |
Your solicitor or conveyancer will normally calculate the amount of stamp duty you need to pay, on your behalf. They will then often bill you for the stamp duty, before your completion date, so they have the funds readily available. Typically, you then have 14 days to pay any stamp duty with HMRC.
Please note that your stamp duty can be added to your mortgage. However, in doing so, it may incur a higher interest rate that must be paid off straight away, and cannot be paid in instalments.
At The Levels Financial, we are here to help you with every step of your home-buying journey. From your initial consultation through to completion, you can rely on our award-winning, honest and jargon-free advice.
Find out more about how we can help you with your home purchases and contact our team today at admin@thelevelsfinancial.co.uk or call us on 01458 772 040.
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Please note:
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.
