Stamp duty is a tax charged when you buy a property - and it can add thousands of pounds to your overall bill.
It applies all across the UK, although it is called “land and buildings transaction tax” in Scotland and “land transaction tax” in Wales.
You only pay stamp duty over a certain threshold, with first-time buyers being given a bigger discount.
New Prime Minister Liz Truss and Chancellor Kwasi Kwarteng are reportedly planning to cut stamp duty as part of their mini-Budget this week.
The idea was intended as the "rabbit out of the hat", Whitehall sources told The Times.
Here, we explain everything you need to know about stamp duty...
Who has to pay stamp duty?
Under the current rules, you have to pay stamp duty on any property worth over £125,000 in England and Northern Ireland, providing this is your main residence.
This is unless you're a first-time buyer, in which case you don't pay stamp duty up to £300,000 - as long as the property you're buying is worth less than £500,000.
In Scotland, you have to pay stamp duty on properties worth over £145,000 - again if this is your main residence - or £175,000 if you're a first-time buyer.
If you're buying a second home in England, Northern Ireland or Scotland, stamp duty is charged if the property is worth more than £40,000.
In Wales, you pay stamp duty on properties worth over £180,000 if this is your only home.
How much is stamp duty?
Here are the stamp duty rates for England and Northern Ireland:
Stamp duty rates (England & Northern Ireland):
- Purchase price - up to £125,000 (£300,000 for first-time buyers) ; Rate for main residence - 0% ; Rate for additional properties - 3%
- Purchase price - £125,001 to £250,000 ; Rate for main residence - 2% ; Rate for additional properties - 5%
- Purchase price - £250,001 to £925,000 ; Rate for main residence - 5% ; Rate for additional properties - 8%
- Purchase price - £925,001 to £1,500,000+ ; Rate for main residence - 10% ; Rate for additional properties - 13%
- Purchase price - £1,500,000+ ; Rate for main residence - 12% ; Rate for additional properties - 15%
Land and buildings transaction tax rates (Scotland):
- Purchase price - up to £145,000 (£175,000 for first-time buyers) ; Rate for main residence - 0% ; Rate for additional properties - 4%
- Purchase price - £145,001 to £250,000 ; Rate for main residence - 2% ; Rate for additional properties - 6%
- Purchase price - £250,001 to £325,000 ; Rate for main residence - 5% ; Rate for additional properties - 9%
- Purchase price - £325,001 to £750,000 ; Rate for main residence - 10% ; Rate for additional properties - 14%
- Purchase price - £750,000+ ; Rate for main residence - 12% ; Rate for additional properties - 16%
Land transaction tax rates (Wales):
- Purchase price - up to £180,000 ; Rate for main residence - 0% ; Rate for additional properties - 4%
- Purchase price - £180,001 to £250,000 ; Rate for main residence - 3.5% ; Rate for additional properties - 7.5%
- Purchase price - £250,001 to £400,000 ; Rate for main residence - 5% ; Rate for additional properties - 9%
- Purchase price - £400,001 to £750,000 ; Rate for main residence - 7.5% ; Rate for additional properties - 11.5%
- Purchase price - £750,000 to £1,500,000 ; Rate for main residence - 10% ; Rate for additional properties - 14%
- Purchase price - £1,500,000+ ; Rate for main residence - 12% ; Rate for additional properties - 16%
Working out how much stamp duty you have to pay can be confusing.
The tax is calculated on the part of the property purchase price falling within each band.
For example, if you buy a house for £350,000 in England or Northern Ireland, the stamp duty you owe is calculated as follows:
0% on the first £125,000 = £0
2% between £125,001 and £250,000 = £2,500
5% between £250,001 and £350,000 = £5,000
Total stamp duty = £7,500
Is stamp duty being cut?
Whitehall sources have told The Times that this could be part of the packaged announced in the mini-Budget this Friday - but nothing has been confirmed by the Government yet.
It also isn't clear how much stamp duty could be cut by - and if it would benefit first-time buyers or home-movers more.
The Government announced a stamp duty cut during the Covid pandemic to try and stimulate the property market.
The tax break for homes in England and Northern Ireland meant you didn't need to pay stamp duty on properties worth up to £500,000.
But the scheme wasn't without criticism, with some property experts blaming the tax holiday for pushing up house prices to record levels.
Karen Noye, mortgage expert at Quilter, said: "Part of the reason why the housing market defied expectations during the various lockdowns was due in part to the frenzy whipped up by the stamp duty holiday put in place by Rishi Sunak.
"However, while the tabled stamp duty cut could once again get the market motoring. It could also provide another hammer blow for first time buyers who may not be rejoicing about this news.
"First time buyers already didn’t have to suffer stamp duty on properties costing less than £300,000 but may now need to compete in a market with often more well capitalised buyers.
"This doesn’t even take into account the huge house price increases we have seen over the past year making saving for a deposit near impossible without outside help."
