Reduced rates of Stamp Duty Land Tax (stamp duty) on residential properties from 1 July 2021 has returned to the standard rate from today, 1 October 2021.
The reduced rate meant that if you bought a residential property between 1 July 2021 and 30 September 2021, you would only start to pay stamp duty on the amount you pay above the £250,000 threshold. From today, you will start to pay stamp duty on the amount you pay above £125,000.
Stamp duty is calculated at the time of completion, not exchange of contracts. So, if you did not complete on your property purchase by 30 September 2021, you will be paying stamp duty at the standard rate.
Below gives an idea of what you can expect to pay (assuming higher or lower rates do not apply to your purchase due to your circumstances): –
- Up to £125,000 = Zero
- The next £125,000 (the portion from £125,001 to £250,000) = 2%
- The next £675,000 (the portion from £250,001 to £925,000) = 5%
- The next £575,000 (the portion from £925,001 to £1.5 million) = 10%
- The remaining amount (the portion above £1.5 million) = 12%
For example, if in October 2021 you buy a residential property for £320,000, the stamp duty you owe will be calculated as follows: –
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £70,000 = £3,500
- Total stamp duty = £6,000
For more information, please contact our conveyancing team.