What is stamp duty?

One of the crucial costs to factor into your budget is Stamp Duty Land Tax (SDLT). This tax applies to property purchases and varies depending on the property's price, its location, and whether you’re a first-time buyer or an investor.
What is Stamp Duty?
Stamp Duty is a tax levied on property transactions in England and Northern Ireland (other regions, like Scotland and Wales, have their own systems). The amount you pay is calculated as a percentage of the property’s purchase price, with different rates applying to different price brackets.
Current Rates
As of 2023, first-time buyers can benefit from relief on properties costing up to £425,000. For properties above this threshold, standard rates apply, starting at 2% for homes priced between £250,001 and £925,000, and increasing for higher-priced homes.
For example:

• Up to £250,000: 0%
• £250,001 to £925,000: 2% on the portion of the price within this range
• £925,001 to £1.5 million: 10%
• Over £1.5 million: 12%

Why is it Important?
Understanding Stamp Duty is essential as it significantly impacts your overall budget when purchasing a home. It's a one-off payment that can add thousands to your initial costs, so it's wise to calculate this expense before finalizing your property purchase.
Planning Ahead
If you’re considering buying a home, keep Stamp Duty in mind as you assess your finances. Be sure to check for any changes to the rules or rates, as they can shift with government budgets. By planning for this tax, you can make informed decisions and avoid any surprises during the buying process.