What Is Stamp Duty and How Much Do You Pay?

Stamp Duty must be paid when purchasing a property of land in England and Northern Ireland. This tax applies when you buy a residential or commercial property above a certain price threshold.

The purpose of this tax is to generate revenue for the government and act as a means to regulate the property market. Learn more about Stamp Duty and how much you can expect to pay when buying a new build home with Berkeley Group.

A Guide to Stamp Duty

In this guide, we’ll answer key questions about Stamp Duty, including:

  • What is Stamp Duty?
  • How much is Stamp Duty?
  • Who pays Stamp Duty?
  • When do you pay Stamp Duty?

What Is Stamp Duty?

Stamp Duty Land Tax (SDLT), more commonly known as Stamp Duty, is a government tax that must be paid when you buy a new home. The amount is calculated as a percentage of the price you pay for your new home. However, this percentage can vary depending on the property price and the number of homes you already own.

For instance, if you already own a home and plan to buy a second, you can expect to pay an additional 5% on top of the residential Stamp Duty. This figure comes as a result of the Autumn Budget announced on 30th October 2024—a 2% increase from the previous surcharge.

How Much Is Stamp Duty?

Stamp Duty rates vary depending on several factors, including whether you’re a first-time home buyer, whether the property you’re purchasing is your primary residence or a second home and whether you’re a UK resident.

Under regular circumstances, the typical Stamp Duty residential rates have been outlined below. These figures do not consider the additional costs incurred for second-home buyers.

            Stamp Duty residential rates
 Up to £250,000 (or £425,000 for first-time home buyers)  0%
 £250,001 to £925,000  5%
 £925,001 to £1.5 million  10%
 Over £1.5 million  12%

To find out exactly how much Stamp Duty you’ll be required to pay, you can use a Stamp Duty Calculator.

Who Pays Stamp Duty?

Stamp Duty must be paid if you:

  • buy a freehold property
  • buy a new or existing leasehold
  • buy a property through a shared ownership scheme
  • take on a mortgage or buy a share in a house

Stamp Duty is always the buyer’s responsibility. It is paid when buying a property or plot of land over a certain price threshold. This price threshold is subject to change, but current information can always be found through GOV.UK.

First-Time Buyer Stamp Duty Relief

If you're a first-time buyer, you don't have to worry about Stamp Duty unless you’re buying a home that's over £425,000. This is known as the first-time buyers’ relief.

There are some exceptions to this exemption, such as if the property you’re buying is over £425,000 (but less than £625,000). If this is the case, you will pay a 5% Stamp Duty on the remaining amount of up to £200,000. If the property you’re buying costs over £625,000, you will not apply for the first-time buyers’ relief.

When Do You Pay Stamp Duty?

For current homeowners moving to a new house, you'll have to pay Stamp Duty for anything over £125,000. This is typically paid as a lump sum when the sale is agreed and finalised.

In England, Stamp Duty must be paid within 14 days of completion (the date when all contracts are signed and you receive the keys).

Find Your New Home With Berkeley Group

Here at Berkeley, we’re committed to helping your move go as smoothly as possible. Our customer commitment is of the highest level, with dedicated teams to help
support you from start to finish.

If you’re interested in buying with us, take a look at our new homes for sale in popular locations across the UK, including London, Oxfordshire, Surrey and many locations in between.

Find out more about Berkeley Group or contact us today.