Do You Pay Stamp Duty When Selling a House?

Selling a home can be stressful and full of complicated questions, and one of the biggest concerns is the fees. One question on a lot of homeowners’ lips is ‘Do you have to pay stamp duty when you sell a house?’ 

Luckily for you, at Jon Simon, we’ve got over 15 years of experience in the property market. With a multitude of quality properties on sale across Bacup, Burnley, Radcliffe, and Ramsbottom, we’re here to get to the bottom of this question. In this blog, we’ll go into detail about what stamp duty is, as well as whether you need to pay it or not. 

Let’s dive into stamp duty in a bit more detail and find out ‘do you pay stamp duty when selling a house’…

What is stamp duty? 

Stamp duty, also known as Stamp Duty Land Tax (SDLT), is a tax paid by the buyer of a UK residential property when the purchase exceeds £125,000. Stamp duty rates can range from 2%-17% depending upon the value of the property bought, the purchase date, and whether you are a multiple homeowner. 

It’s designed to generate revenue for the government and can also be used to influence the housing market, such as discouraging property speculation. Buyers pay stamp duty tax when they: 

• 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 

Who pays stamp duty? 

It is always the home buyer who pays stamp duty, not the seller or landlord. Usually, your solicitor will pay it on your behalf as part of the purchase process. They will also claim any tax relief that you might be eligible for. If they don’t do this on your behalf, you will have to file the stamp duty return, which can be done online or in the post, and pay the tax yourself. 

How much is stamp duty? 

There are several different band rates for stamp duty. You can expect to pay stamp duty on the purchase of a main property costing more than £125,000 – unless you are a first-time buyer (more on this below!). 

From 1st April 2025, the thresholds returned to their pre-2022 rate, meaning buyers of homes worth £125,000 or less don’t pay stamp duty. The threshold for first-time buyers is £300,000 when buying a home of less than £500,000. Any property worth more than this doesn’t qualify for First-Time Buyers’ Relief. 

If you already own a residential property worth £40,000 or more and you buy another, then you will have to pay an additional 5% on top of the main rates. Therefore, if you buy another property and become a multiple homeowner, the total percentage of stamp duty you pay on a property that is worth £125,000 or less would be 5% instead of 0%. 

Here’s another example to make it easier for you. If you are not a first-time buyer and you buy a house for £200,000, but that property is the only one owned by you after the sale, the Stamp Duty Land Tax that you owe is calculated like this:

• 0% on the first £125,000 = £0
• 2% on the amount from £125,001-£250,000 = £1,500

Therefore the total stamp duty to pay is £1,500. Discover the full breakdown of percentage rates below. 

For more information about tax, check out our blog post: Tax To Know About When Selling Your House. 

Stamp duty rates

The table below shows the current stamp duty rates and thresholds for buyers in England and Northern Ireland: 

Can stamp duty affect selling a house? 

At a glance, it can seem like stamp duty only affects the buyer. However, stamp duty can indirectly impact you as a seller. When a potential buyer is budgeting for a house purchase, they have to factor in all associated costs, with one of the most significant costs being stamp duty. 

This tax can add a considerable amount to the total sum that a buyer needs to pay to secure their property. So, if a stamp duty on a home is particularly high, it could discourage potential buyers or might reduce the amount they’re willing to offer for your property. 

In essence, the higher the stamp duty, the less money the buyer might have available to put towards your asking price. 

Stamp duty exceptions and special circumstances

Like with most things, there are some reliefs and exemptions when it comes to stamp duty. Some of these include: 

• If the value of the freehold is less than £40,000
• There is a licence to occupy
• If the property was a gift of land
• The transfer of land in a divorce or on death
• The transfer of land to a charity or charities buying for charitable purposes
• The transfer of land within a group of companies where an SDLT group relief claim is made 

If you are a first-time buyer in England and Northern Ireland, then you might be eligible for first-time buyer relief on purchases of residential property worth up to £500,000. The current rates are:

• 0% on the first £300,000
• 5% on the remainder up to £500,000 

It’s worth noting that First-Time Buyers’ Relief only applies if you intend to occupy the property as your main residence.

Sell your house with confidence with Jon Simon 

Hopefully, you now have the answer to the question ‘Do you pay stamp duty when selling a house’. In short, stamp duty is always paid by the person buying the property, never the seller, and currently applies to home purchases over £125,000 (£300,000 for most first-time buyers). 

For over 15 years we’ve been successfully selling and managing properties, so, if you’re selling your house or are interested in renting, we’re here for you every step of the way, whether that’s making an offer or signing the final contract. 

For further enquiries, please don’t hesitate to contact us. Or, request a free online valuation and discover exactly how much your home could be worth today! You can also check out our blog for similar topics. 

FAQs

Do I have to pay stamp duty if I sell my property?

You do not have to pay stamp duty on the sale of your property. This is paid by the buyer only. However, if you are buying another property following the sale of your current property, stamp duty may apply. This is subject to the value of the property you’re buying, the purchase date, and whether you are a multiple homeowner. 

What tax do you pay when you sell a house?

In many cases, you won’t need to pay any tax when selling your house. However, there are three main taxes to be aware of in certain situations:

Capital Gains Tax (CGT)

CGT is a tax on the profit you make when selling or disposing of an asset that has increased in value. However, you may automatically qualify for Private Residence Relief and won’t have to pay any CGT if:

• The home your selling is your only property or your main residence while you owned it
• You haven’t rented, part-rented, or used the property for business purposes
• The total grounds of the property are 5,000 sq metres or less

Income Tax

This is a tax on the financial earnings of individuals and businesses. Therefore, this will only apply to your property if you’ve rented it out or used part of it exclusively for business.

Inheritance Tax

This is a tax on the entire estate, including property, of someone who has died. Inheritance Tax is often dealt with during probate, however, CGT may apply and is calculated on the difference between the value when inherited and the price it sells for.

When do you have to pay stamp duty?

Buyers have 14 days to pay stamp duty from the date of completion in England and Northern Ireland (30 days in Scotland and Wales). Late payments could result in a fine or you could be charged interest on the amount you owe. 

How do you pay stamp duty?

Stamp duty is usually paid for by the solicitor on behalf of the buyer. However, you can pay directly via usual payment channels, such as online, or by cheque or cash in most banks. Alternatively, you can add stamp duty to mortgage loans and increase your debt, however, this could result in a significant increase in the total amount paid due to interest.

Do you pay stamp duty in Scotland and Wales?

In Scotland, the equivalent of stamp duty is Land and Buildings Transaction Tax (LBTT). Current rates are:

• £0 to £145,000 (£175,000 for first-time buyers) = 0%
• £145,001 to £250,000 = 2%
• £250,001 to £325,000 = 5%
• £325,001 to £750,000 = 10%
• £750,001+ = 12% 

In Wales, the equivalent of stamp duty is Land Transaction Tax, external (LTT). Current rates are:

• £0 to £225,000 (no relief for first-time buyers) = 0%
• £225,001 to £400,000 = 6%
• £400,001 to £750,000 = 7.5%
• £750,001 to £1.5m = 10%
• £1.5m+ = 12%