Stamp duty land tax is a fee you must pay when purchasing a property that costs over £125,000.
Stamp Duty Land Tax applies to properties that cost over £125,000 except in Scotland where Stamp Duty doesn’t apply. Instead you’ll pay the Land and Buildings Transaction Tax when you buy a property. This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage. You pay 0% for the first £125,000, 2% on the portion up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on anything above that.
Your stamp duty payment can be very significant and you need to factor this in to your budget when considering how much deposit you will need to purchase.
From 1 April 2016, Stamp Duty Land Tax will increase by 3% on top of current rates for purchases of additional residential properties above £40,000, such as buy to let properties and second homes.