How does stamp duty work in the UK?

Buying a property can be a bit of a challenge for many, especially since it involves a significant lump investment of money of your own or borrowed. If you are a first time buyer, a second property owner, or a business venture, you are liable to pay stamp duty on the property you purchase, with some exceptions in certain cases.

Let’s look at how stamp duty is applicable when purchasing a property in the UK. Read on.

Why pay stamp duty for property?

Purchasing a property in most parts of the world using a mortgage or not, you may be required to pay a sum of money to the government of that country based on the value of the property you are purchasing. This is usually termed as stamp duty. In the UK it is abbreviated as SDLT, meaning, ‘Stamp Duty Land and Tax’.

The money generated by the sale of any property becomes the property of the country’s treasury, which in turn helps the overall economy of the country with the financial inflow. 

SDLT is applicable as per the case may be. For instance if you are purchasing a property for residential purposes, you will be liable to pay stamp fees if the property transaction is over £250,000. Commercial or non-residential properties are liable to pay stamp duty if the  value is over  £150,000. Commercial property stamp duty rates are calculated on different ‘slabs’ of value based on increasing portions of the property.

This is how it works…

Stamp duty is applicable for almost every purchase of property within the UK. However there are exceptions. If the sale value of your property is less £250,000, you are not liable to pay stamp duty. Similarly, if you are a first time property buyer, and purchasing a property for less than £300,000, you will be exempt from paying stamp duty. Properties acquired through inheritance or entitled through a divorce proceeding may also be exempt from stamp duty. However, it might be pertinent to check with your mortgage advisor about the proper exemption clauses before proceeding to ‘not pay’ stamp duty.

Stamp duty is payable by the purchaser or the buyer of the property and not the seller. The process of ownership transfer may sometimes be confusing and involve some unfamiliar areas. If you do find this process overwhelming, it might be a good idea to obtain the services of a conveyancer. They will carry out the needful aligning to the correct procedure of paying off the stamp duty.

Does everyone have to pay stamp duty?

As briefly described above, there are certain instances where stamp duty may not be payable.

If you decide to gift your house and property to someone, the recipient of the gift property will not be liable to pay stamp duty. However if there are outstanding payments such as an ongoing mortgage, the value threshold of the property will be accounted for and stamp duty will be payable based on that property’s value. Here again you may have to obtain the advice of an expert mortgage broker, such as an adviser from BVS Financial Services to provide insight into how stamp duty is applicable for gift properties.

Another reason that you may not have to pay stamp duty in the UK would be if you are legally getting divorced. In this instance the transfer of property to one partner will not incur a stamp duty payment. However, if the couple is separated without a court order, stamp duty will apply for the transfer and they will have to pay the applicable fee.


Stamp duty for the sale of a property as we have seen in this article is a vital part of a property sale. This is a norm not just in the UK, but around the world. And importance of stamp duty of course boils down to the revenue that is generated towards running the country and if compared, is equal to a form of taxation.

While exceptions do exist, such as first time property owners, gift recipients, etc, SDLT needs to be paid in the majority of property sales.

In some cases you may find yourself a bit too busy or rather overwhelmed to handle the transactions of stamp duty payments, in which case you may prefer to seek the assistance of a conveyancer who will handle all that for a nominal fee. If you are thinking about purchasing a property and are unsure about the SDLT you may have to incur, why not speak to a mortgage broker to gain a heads up on what type of monetary commitment you may have to meet? Speak to a mortgage broker at BVS for update information on Stamp Duty payments and you’ll be ready to make your next property purchase.


* Approved by The Openwork Partnership on 16 August 2023

Leave a Reply