What is stamp duty and how much is it?

What is stamp duty and how much is it?

Ray Boulger (Mortgage Advisor) gives expert video advice on: What is a Homebuyer's Report?; What is stamp duty and how much is it?; Is there anyway that I can avoid paying stamp duty? and more...

Stamp duty tax is a tax imposed by the government on property purchase, and it starts at 1% for properties costing above £125,000. Up to £125,000 there is no tax. Above that, up to £250,000, it's 1%. Above £250,000, up to half a million, it's 3%, and above half a million it's 4%. Stamp duty is an inequitable tax, because instead of the tax going up gradually, so that when you cross a threshold, you only pay the higher amount on the additional amount that you're paying for the property, once you cross that threshold, the higher amount is paid on the total value of the property. For example, on a property costing £250,000, you would pay 1% tax, i.e. £2,500. If you were to pay £250,001 for a property, you would pay 3%, i.e. just over £7,500 pounds, and that's one of the big problems with the way that stamp duty land tax is calculated.