Stamp Duty Explained: Who Pays, How Much & When

Stamp Duty Explained: Who Pays, How Much & When

If you’re buying a property, you’ve likely heard the term “stamp duty”, but it can be a confusing part of the process. At The Personal Agent, we believe in providing clear, straightforward advice to help you navigate your property journey with confidence. In this guide, we provide a simple breakdown of this, answering the key questions of who pays stamp duty, how much it costs and when the payment is due. Whether you’re moving up the ladder or investing in a second property, understanding stamp duty is vital for budgeting with confidence.

What is stamp duty?

Stamp Duty Land Tax (SDLT) is a government tax paid when you buy property or land in England and Northern Ireland. The amount depends on the purchase price, with different bands applying to different portions of the property’s value. In Scotland, the equivalent tax is Land and Buildings Transaction Tax (LBTT), while in Wales it is Land Transaction Tax (LTT). These systems operate separately with different thresholds and rates.

Who pays stamp duty?

One of the most common questions we hear is: Do you pay stamp duty when you sell a house? The answer is no, stamp duty is always paid by the buyer, never the seller. In practice, your solicitor or conveyancer will calculate the amount owed, collect it from you before completion, and pay HMRC on your behalf. This ensures the payment is accurate and made on time.

How much is stamp duty?

Stamp duty is charged in bands, so you only pay the higher rate on the portion of the property’s value within that bracket. As of April 2025, SDLT applies in progressive bands. The first £125,000 is tax-free, followed by 2% on the portion between £125,001 and £250,000. Purchases from £250,001 to £925,000 are taxed at 5%, £925,001 to £1.5 million at 10%, and anything above £1.5 million at 12%. For example, a £295,000 property attracts £4,750 in SDLT, £2,500 on the band up to £250,000, plus £2,250 on the portion above.

It’s important to note that rates differ for those moving home and those buying an additional property (which incurs a surcharge). As for stamp duty for first-time buyers, those looking to make their initial step onto the property ladder will be pleased to know that they may be eligible for relief. For up-to-date rates and a clear example, it’s always best to use the official government stamp duty calculator or speak to a property professional.

Stamp duty relief for first-time buyers

If you (and anyone you’re buying with) are purchasing a home for the first time, you pay no stamp duty at all up to a certain value – currently £300,000. A rate of five percent applies to properties valued at between £300,001 and £500,000. This means a first-time buyer would pay £10,000 in stamp duty on a home worth £500,000. This relief is only available if you and anyone you are buying with have never owned property before, either in the UK or abroad. It is a significant saving that can free up funds for moving costs, furnishings, or future renovations, helping new homeowners manage their budgets with greater confidence.

When and how do you pay stamp duty?

Stamp duty must be paid within 14 days of completion, the day you legally take ownership and receive the keys. In almost all cases, your solicitor or conveyancer will manage the process: calculating the amount, submitting the SDLT return to HMRC, and transferring the funds. To avoid delays, it’s essential to budget for this payment alongside your deposit, legal fees and moving costs.

Stamp duty pitfalls and additional property rules

Stamp duty is a legal requirement. Missing the 14-day deadline can result in HMRC penalties, including fines and interest. If you’re buying an additional property worth more than £40,000, such as a second home or buy-to-let, a 3% surcharge applies on top of standard rates. This can add thousands to your costs, so it’s important to factor it into your budget early.

Planning ahead: stamp duty in the UK housing market

Stamp duty thresholds and reliefs are regularly adjusted in government budgets, but the tax itself has long been a fixture of the UK property market. Factoring SDLT into your budget early helps you avoid surprises and plan purchases with clarity. For buyers in Surrey and surrounding areas, At The Personal Agent, we not only help buyers find the right property, but also ensure you understand the costs involved at every stage, from stamp duty to long-term planning, so you can make confident, informed decisions

FAQs

What is stamp duty, and who pays it? Stamp duty is a tax on property purchases in England and Northern Ireland. The buyer of the property is always the one who pays it.

Do you pay stamp duty when you sell a house? No, you do not pay stamp duty when you sell a property. The tax is only applicable to the person or people buying the home.

At what point in buying a house do you pay stamp duty? Stamp duty is due within 14 days of the completion of your property purchase. Your solicitor will usually collect the funds from you beforehand and make the payment to HMRC on your behalf.

Do I have to pay stamp duty if my property is £250,000? It depends on your circumstances. A first-time buyer might pay no stamp duty at this price due to relief. Someone moving home would pay a certain amount based on the current tax bands, while an investor buying an additional property would pay the standard rate plus a five percent surcharge.

Who pays stamp duty, me or the solicitor? You, the buyer, are ultimately responsible for paying the stamp duty. However, your conveyancer or solicitor will handle the administrative process of filing the return and transferring the payment to HMRC using the funds you provide.