How to Calculate Stamp Duty on Property

As long as you know your property value, calculating stamp duty on property in the UK is easy.

Stamp duty on property is payable in the United Kingdom (UK) when you purchase or transfer property or land and the value exceeds the threshold set by Her Majesty's Revenue and Customs (HMRC). The official title is Stamp Duty Land Tax (SDLT). HMRC generally has to be notified about land transactions even if stamp duty is not payable. Rules exist to calculate stamp duty on property in the UK based on what is called a chargeable consideration. This can vary depending on the use of the land and whether it is freehold or leasehold.

Step 1

Use the purchase or transfer price of your property as the basis for calculating stamp duty on property in the UK.

Step 2

Calculate the stamp duty payable by multiplying your property value by the SDLT rate set by HMRC (see Resources). The rates as at 2010 are: Zero between £0 and £125,000, 1 percent between £125,001 and £250,000; 3 percent between £250,001 and £500,000. Above £500,000 the rate is 4 percent. For example, if your property or transfer value is £200,000, multiply this figure by 1 percent to give stamp duty tax of £2,000.

Step 3

Recheck your calculation to ensure you have obtained the correct figure.

Tip

If you are a first-time buyer, stamp duty is zero-rated up to £250,000 between March 25, 2010 and March 24, 2012.

Variations and exemptions on stamp duty rates exist for different property types. Check the HMRC website for details (see Resources).

Warning

Stamp duty is payable on the total value of your property at the rate set within the band. For example, if your property value is £300,000, you must pay 3 percent of £300,000, which equals £9,000 and not zero on the first £125,000, 1 percent on the next £125,000 and 3 pecent on the remaining amount.

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