Stamp Duty

What Is Stamp Duty?

Stamp duty is a tax payable to the UK Inland Revenue on legal documents, which are then endorsed by an official embossed stamp that confirms payment. This tax is payable on contracts relating to the buying or renting of a property (and also on buying stocks and shares).

Buying A Property

When buying a property or land in England, Wales or Northern Ireland, you as the purchaser, are responsible for paying stamp duty on a property. The vendor does not pay anything. Your legal adviser will usually collect the monies from you and forward them on to the stamp office. If you are buying a freehold property or a leasehold

Up to and including £125,000	Nil
Over £125,000 and not more than £250,000	1% (rounded up to the nearest £5)
Over £250,000 and not more than £500,000	3% (rounded up to the nearest £5)
Over £500,000	4% (rounded up to the nearest £5)

(Figures and rates last updated 16.3.2005)

Click here to go to the Inland Revenue's website where you can get more in depth and up to date information on buying a freehold property.

If you are buying a leasehold property and a new lease is required the stamp duty is calculated on the amount you paid for the property and what the average annual rent is over the term. The duty payable on the amount you paid for the property is calculated as per the above table, but you must add the annual rent payable to the premium. Click here to go to the Inland Revenue's website where you can get more in depth and up to date information on buying a leasehold property.

Renting a Property

When renting a property the Tenant is liable for ensuring that the tenancy agreement signed by the Landlord is sent to the Inland Revenue for stamping. If there is a counterpart to the agreement which is signed by the Tenant then the Landlord should send this for stamping.

In order to save money, you may consider NOT sending the document for stamping. However, be advised that if you get into a dispute with your Landlord, the tenancy agreement is not admissible in court unless it has been stamped. There are quite hefty penalties applied for late submissions!!

When working out how much duty is payable you will need to know whether the property is furnished or unfurnished, the length of the term (amount of time the property is being let for) and whether there is any premium payable.

To work out how much duty is payable on what the Inland Revenue class as a "short tenancy", having a term of less than 7 years click here.

What Penalties and Interest Can I Incur?

Agreements have to be stamped within 30 days from when they are dated. If they are presented late you will incur a penalty. If you are late in getting all or part of the monies to the stamp office you will be charged interest.

Where Should I Send My Document To Be Stamped?

There are eight offices that you can send your documents to be stamped. Click here for a list of the offices, addresses and contact details.

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