Stamp duty: What is it and how much do I pay?

The government has cut its stamp duty tax in England and Northern Ireland.

The amount of stamp duty you pay depends on the cost of the property.

Chancellor Kwasi Kwarteng announced new rates for England and Northern Ireland as part of the government's mini-budget.

The chancellor added: "We're going to increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000."

He said the steps would take 200,000 more people out of paying stamp duty altogether, adding "this is a permanent cut to stamp duty, effective from today."

Scottish landlords pay an extra 4% Land and Buildings Transaction Tax on top of standard rates.

For example, a second-time buyer purchasing a home worth £425,000 in Scotland would pay £15,850.

Welsh landlords pay an extra 4% Land Transaction Tax on top of standard rates.

You have 14 days to pay stamp duty from the date of completion in England and Northern Ireland.

In Scotland and Wales you have 30 days from the point of purchase.

If it takes longer, you could face a fine, or be charged interest on the duty you owe.

House buyers often pay via their solicitors, but you can also pay directly online, or by cheque or cash in many banks.

It is also possible to add stamp duty to mortgage loans and increase your debt to cover the cost of the tax but you could end up paying significantly more in interest payments.

During the pandemic, the government announced a stamp duty holiday to help home buyers whose finances were affected by Covid. It meant no stamp duty was payable on the first £250,000 of a property.

The holiday was originally due to end on 31 March 2021, but was later extended in England and Wales until 30 June, and then again in England until 30 September.

The stamp duty holiday was widely thought to have stimulated the housing market.

Estate agents reported a surge of interest in March 2021, as buyers and sellers rushed to complete property deals before the scheme was initially due to end.

Demand continued when the holiday was subsequently extended.

However, many things may have contributed to rising house prices.

"The final closure of the stamp duty scheme at the end of September 2021 may have had no impact at all," says Nicky Stevenson, managing director at estate agents Fine and Country.

"Other factors are so much more important, namely the race for space, low supply, accidental savings [from the pandemic] and low interest rates."

That's roughly equivalent to 2% of the tax the Treasury collects.

The policy is designed to help more first-time buyers secure a home.

The scheme is available to anyone buying a home costing up to £600,000, unless it is a buy-to-let property, a second home or, in some cases, a new-build.

The Welsh government also runs various schemes to help people to buy a home.