What Stamp Duty do you pay on a house? Why amount may rise if there’s a house sale delay

For residential properties, the current Stamp Duty Land Tax (SDLT) threshold is £125,000. This increases to £150,000 for non-residential land and properties. If the sale is greater than this threshold, then the buyer is required to pay Stamp Duty Land Tax. The rates differ depending on the purchase price.

There are also some instances where a person may pay a different rate, such as if they’re a first-time buyer and can benefit from the SDLT relief for first-time buyers.

For those eligible for this discount, SDLT is not payable up to £300,000, and then the rate stands at five per cent on the portion from £300,001 to £500,000.

If the purchase price exceeds £500,000, then the first-time buyer cannot claim the discount.

For freehold sales and transfers for those who have already bought their first home, the SDLT rates are as follows.

Up to £125,000, the SDLT rate is zero.

For the next £125,000 – so from £125,001 to £250,000 – the rate is two per cent.

The SDLT rate for the next £675,000 (the portion from £250,001 to £925,000) is charged at five per cent.

This rises to 10 per cent for the the portion from £925,001 to £1.5 million.

Any portion of the purchase price greater than £1.5 billion has a SDLT rate of 12 per cent.

Usually, if a buyer purchases a new residential property thus meaning they’ll own more than one, a higher SDLT rate will be required to be paid.

This normally stands at three per cent on top of the normal SDLT rates.

The Gov.uk website points out that this is not required to be paid if the property being bought is replacing one’s main residence, and that has already been sold.

However, it warns that if there’s a delay in selling the main residence and it has not been sold on the day the buyer completes their new purchase, the higher rates would need to be paid.

That said, if the previous main home is sold within 36 months, the individual may be able to get a refund.

An SDLT return must be sent to HM Revenue and Customs (HMRC) and the tax must be paid within 14 days of completion.

If a buyer has a solicitor, agent or conveyancer, they may file the return and pay the tax on the day of completion, instead adding the amount to their fees.

READ MORE: Stamp Duty Land Tax MAPPED: UK locations with biggest SDLT spend – is it where you live?