You have to pay the tax when you:

• buy a freehold property
• buy a new or existing leasehold
• buy a property through a shared ownership scheme
• take on a mortgage or buy a share in a house

The amount of stamp duty you owe depends on the cost of the property, whether it will be used for residential purposes, and whether you own any other property.

How much is stamp duty and how is it changing?

At the moment, buyers of homes worth less than £250,000 don’t pay any stamp duty.

This limit was temporarily doubled from £125,000 in the September 2022 mini-Budget.

The threshold for those buying their first property is £425,000 (when buying a home of less than £625,000), which was raised from £300,000 (when buying a home of less than £500,000), as part of the same mini-Budget.

The current stamp duty rates are:

• £0-£250,000 (£425,000 for most first-time buyers) = 0%
• £250,001-£925,000 = 5%
• £925,001-£1.5m = 10%
• £1.5m+ = 12%

From 1 April the zero percent threshold will drop back to its previous level, and the first time buyers’ threshold will revert to £300,000:

• £0-£125,000 (£300,000 for most first-time buyers) = 0%
• £125,001-£250,000 = 2%
• £250,001-£925,000 = 5%
• £925,001-£1.5m = 10%
• £1.5m+ = 12%

If you already own a residential property worth £40,000 or more, and you buy another (or a part of one), you also have to pay an additional amount on top of the rates above, external.

From 1 April, this will be another 5% on properties worth up to £125,000, with higher rates for more expensive purchases.

Firms which buy dwellings worth more than £500,000 have to pay a single rate of stamp duty of 17%.