How much Stamp Duty will I pay now?

Looking to buy a new house in the North East? Not sure what Stamp Duty is?

If you’re based up North, it’s unlikely you will be paying a high Stamp Duty rate, if any. While people moving home in London can, on average, spend £14,289 on Stamp Duty, here in the North East, the average spend is just £38.89.

Scotland and North East England saw no changes when the cost of moving house on account of the Stamp Duty change, because of the low prices of houses for first time buyers in the area (moving costs remained at £1,331 and £1,531 respectively).

In terms of overall affordability, the North East ranks top with the average first-time buyer house price coming in at just £118,118, with Yorkshire and the Humber (£152,827) and the North West (£155,088) following behind.

Again, the North offers some of the greatest overall affordability with first-time buyers in Burnley (£90,048), Hartlepool (£90,882) and County Durham (£97,388) paying the lowest prices in the country when buying their first home.

But, while you may not need to worry about paying Stamp Duty yet, it’s still important to have an idea of what it entails. To help you wrap your head around the tax, we’ve created this handy guide.

What actually is Stamp Duty?

Stamp Duty is a tax charged when you buy a property or land in England, Scotland, Wales and Northern Ireland.

For the past seven years, all the nations have had a Stamp Duty rate system. This means that instead of paying a single rate, your Stamp Duty rate may change depending on the value of the property, and even combine two rates on one property – paying one for a certain portion and a different rate for another.

In July 2020, the government announced a year-long cut to Stamp Duty in order to help buyers whose finances were affected by Covid. Until June 2021, home buyers didn't have to pay Stamp Duty on the first £500,000 of a purchase price – meaning a possible saving of up to £15,000.

The government later extended the tax holiday from July until the end of September this year, meaning during this period – which has now to an end - home buyers didn’t have to pay Stamp Duty on the first £250,000.
How is Stamp Duty changing?

From October 2021, rates returned to pre-Covid levels. Here is a breakdown of the Stamp Duty you would pay based on the price of the property:

• £0 - £125,000 = 0 per cent
• £125,001 - £250,000 = 2 per cent
• £250,001 - £925,000 = 5 per cent
• £925,001 - £1,500,000 = 10 per cent
• £1,500,001+ = 12 per cent

When and how do I pay Stamp Duty?

If you're buying in England or Northern Ireland, you have 14 days from the date of completion/date of entry (when all the contracts are signed and dated, and you get the keys) to pay Stamp Duty or transaction tax. If you take longer, you could face a fine and possibly interest on top, so ensure you have it completed on time.

In reality, your solicitor will most likely sort this for you and encourage you to pay the bill straightaway – in fact, most tend to want the cash before completing the property purchase for you, just in case you then can't or don't pay them.

You can use HMRC’s Stamp Duty Land Tax calculator to work out how much tax you’ll pay.

However, as we mentioned, if you’re looking to buy your house up North, with the average house in Teesside being less than £168,000 the stamp duty would only be £860, not thousands.

For sellers, this also means it’s still a great time to put your house on the market as it continues to boom.

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