Stamp duty is one of the largest (and most overlooked) costs when investing in property. Get it wrong, and you could be facing a surprise bill for thousands at completion. Here’s everything you need to know to stay on top of your numbers and avoid costly mistakes.
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. Scotland has Land and Buildings Transaction Tax (LBTT), and Wales has Land Transaction Tax (LTT), but the principle is the same. You pay a sliding-scale tax based on the purchase price, and the rate is higher if you’re buying an additional or investment property.
Why Is Stamp Duty Important?
- It’s a major upfront cost: After your deposit, stamp duty is often the next biggest expense.
- Rates vary: Stamp duty rates change depending on the property price, location, and whether you already own property.
- Extra for investors: There’s an additional 3% surcharge for buy-to-lets and second homes.
- Can affect your deal: Underestimating stamp duty can ruin your cash flow or even derail a purchase.
How to Calculate Stamp Duty
Instead of struggling with complicated tables and rates, use a stamp duty calculator:
Step-by-step:
- Go to the LenLord website.
- Click on Tools, then Stamp Duty Calculator.
- Select the country where you’re buying (England, Scotland, Wales, or Northern Ireland).
- Indicate if you’re buying an additional property (for investments, tick “Yes”).
- Enter your property purchase price.
- Instantly, you’ll get your exact stamp duty cost, plus a clear breakdown of how it’s calculated.