If you’re looking to move to a property in south west London, you need to understand how stamp duty works and how much you are likely to pay.

Stamp duty has been big news over the past two years. The chancellor introduced his stamp duty holiday in 2020, meaning there was no tax to pay on the first £500,000 of most purchases. The move set in motion the current housing boom, with properties still in demand months after the stamp duty holiday ended.

For buyers in Balham, Battersea, Clapham, Wandsworth, and Tooting Bec, stamp duty is a now payable on the purchase price of your home, after the first £125,000. The rate of stamp duty you pay goes up incrementally with your purchase price to a top rate of 12% for purchases of over £1.5 million.

According to the property portal Rightmove, the average sales price in these south west London areas is currently around £900,000, meaning that the stamp duty due could be a substantial amount to factor in to your house move budget.

Additional stamp duty surcharges are payable on second homes and for purchases by non-UK residents. To help you understand more about the tax, and how much might be due on your south west London property, we answer some frequently asked questions about stamp duty.

What is stamp duty?

Stamp duty land tax (SDLT) is a tax which must be paid when you buy residential property or land in England and Northern Ireland. In Wales it is Land Transaction Tax (LTT) and in Scotland, Land and Buildings Transaction Tax (LBTT).

Do I need to pay stamp duty if I’m selling property?

No, stamp duty is paid by your buyer. However, if you are selling and buying, you would need to pay stamp duty on your own purchase.

How much stamp duty will I pay on my south west London purchase?

Stamp duty rates increase with the purchase price, meaning you pay a higher percentage as the property value rises. However, you only pay the higher percentage for the proportion of the purchase price in each band, or threshold. If that sounds confusing, see the table below for details.

Rates of stamp duty thresholds

For example, if you were buying a property in Wandsworth for £950,000 you would pay nothing on the first £125,000, then 2% on the next £125,000, 5% on the next £675,000 and 10% on the rest of the purchase price, making a total bill of £35,000.

Can I find out exactly how much stamp duty I’ll pay on my south west London home?

For a better idea of how much you will pay on your south west London property, use a stamp duty calculator tool, such as this one on the government website. It will give you an accurate idea of how much stamp duty you’ll pay, given the price of the property and your circumstances.

How much stamp duty will I pay if I buy a second home?

If you already own at least one property, you will usually pay an additional 3% on top of the standard rate. Read more on the government website.

If my new home will be my main residence, do I still pay the second home surcharge?

If you decide to buy your new home, then sell your existing home at a later date, you will own two properties so you will need to pay the surcharge. However, you can claim a refund if you sell your original property within three years.

What if I’m a first-time buyer?

You can claim a discount (also called stamp duty relief) if the property is your first home and the property costs up to £500,000. This means, you’ll pay no stamp duty on the first £300,000 of the purchase then 5% on the rest up to £500,000.

To qualify for the relief, you and anyone you are buying with must be first-time buyers. If the home you are buying costs over £500,000, you cannot claim the relief and will pay the same rates as people who have bought property before.

Can I reduce the stamp duty I need to pay?

Now that the stamp duty holiday is over, most buyers will need to pay the tax at the appropriate rate. Other than properties costing less than £125,000, or first-time buyers, there are some other reliefs and exemptions to the tax. Read more not the government website.

What if I’m an overseas resident?

Non-UK residents will usually pay an additional 2% surcharge on the stamp duty they pay, but certain rules apply. Read more on the government website.

How and when do I pay my stamp duty?

Your stamp duty must be paid within 14 days of your completion date, otherwise you could receive a fine. Usually, your solicitor will pay the stamp duty adding the amount to their final bill. Remember though, it is your responsibility to make sure the tax is paid.

Find out more

If you’re looking at property in south west London, we’d love to help you find your dream home, whether in Balham, Clapham, Battersea, Wandsworth, Tooting Bec or somewhere else. We’d also be happy to advise about stamp duty or any other aspect of buying and selling property. Contact us today.