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Around Three Quarters of First Time Buyers pay Stamp Duty

Calculating stamp duty

Around Three Quarters of First Time Buyers pay Stamp Duty

Last year, 74% of first-time buyers1 paid Stamp Duty Land Tax when they bought their property. Stamp duty is payable on properties worth more than £125,000 (£145,000 in Scotland, where Land and Buildings Transaction Tax applies).

The figures show that just a quarter of first-time buyers bought properties worth less than the stamp duty threshold of £125,000, down from 47% in 2006. With the average property costing over £200,000, according to figures from the Land Registry, more and more first-time buyers are finding themselves paying this tax.

Calculating the tax

Where a property is worth in excess of the nil-rate band, the amount up to £250,000 is charged at 2%, and between £250,000 and £925,000, 5%. This means that first-time buyers purchasing a property for £275,000 would pay £3,750 in stamp duty in England and Wales, and £3,350 in Scotland.

Some commentators have called for the tax to be levied against the seller, not the buyer, to help reduce costs for those entering the housing market.

1Yorkshire Building Society 2017