Do I Pay Stamp Duty When I Sell My House?

When navigating the intricacies of property transactions in the UK, a common question arises: Do I pay stamp duty when I sell my house? The short answer is no, Stamp Duty Land Tax (SDLT) is typically paid by the buyer, not the seller. However, selling a property does come with other tax implications and financial considerations that every homeowner should understand. This article, brought to you by Parkgate, unpacks everything you need to know about stamp duty when selling, and offers clarity on SDLT rules, thresholds, reliefs, and much more.

Understanding Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a tax levied by the UK Government on the purchase of residential and non-residential property in England and Northern Ireland. In Scotland, this tax is called the Land and Buildings Transaction Tax (LBTT), while in Wales, it’s the Land Transaction Tax (LTT)

What Is SDLT?

SDLT is calculated based on the purchase price of a property. The higher the price, the more stamp duty is typically payable. This tax only applies when buying a property, not when selling one. Despite this, the implications of stamp duty are deeply intertwined with the property market and selling strategies.

Who Pays Stamp Duty in the UK?

To be clear: Stamp duty is paid by the person buying the property, not the seller. If you’re selling your house, you won’t directly pay stamp duty, but you should be aware that it could influence the sale process.

• Buyers factor in stamp duty when deciding their maximum offer
• Sellers may need to adjust asking prices to attract buyers impacted by SDLT

Stamp Duty Rules: England and Northern Ireland vs. Scotland and Wales

The rules surrounding stamp duty vary across the UK

Region	Tax Type	Applies To	Paid By
England & NI	Stamp Duty Land Tax (SDLT)	Buyers of property	Buyer
Scotland	Land and Buildings Transaction Tax (LBTT)	Buyers of property	Buyer
Wales	Land Transaction Tax (LTT)	Buyers of property	Buyer

In all UK countries, the seller does not pay stamp duty

What Happens When You Sell Your Home?

Although SDLT doesn’t apply to sellers, other costs and taxes do

Selling a Main Residence

If your home is your main residence, there’s usually no Capital Gains Tax (CGT) to pay when you sell. You’re covered by Private Residence Relief.

Selling an Inherited Property

If you’ve inherited a property and decide to sell, you may have to pay Capital Gains Tax if the value has increased since the date of inheritance.e

Selling a Second Home or Buy-to-Let

Selling a second home or rental property often involves Capital Gains Tax, depending on the profit made. This is entirely separate from stamp duty, but still an important tax consideration.

Capital Gains Tax When Selling Property

Capital Gains Tax is due when you sell a property that is not your primary residence, and you make a profit.

• CGT allowances and rates vary based on your income bracket
• For individuals, the 2024/2025 CGT allowance is £3,000
• Basic rate taxpayers may pay 18%; higher rate taxpayers may pay 28% on residential property

Stamp duty is not part of CGT, but selling costs, including legal fees and estate agent fees, can be deducted from your capital gains

Stamp Duty Relief and Exceptions

Though sellers don’t pay SDLT, buyers may benefit from various stamp duty relief schemes, which could affect your buyer’s budget and influence your sale.

First-Time Buyer Relief

Buyers purchasing a home worth up to £425,000 may be eligible for first-time buyer relief, paying no stamp duty on the first £425,000 of the purchase

Other SDLT Reliefs

• Multiple Dwellings Relief
• Charity Exemptions
• Relief for Crown Employees

Reliefs affect how much buyers pay and may facilitate quicker sales

How Much Stamp Duty Does a Buyer Pay?

The total stamp duty bill depends on several factors

• Property value
• Type of property (residential, non-residential, or mixed-use)
• Buyer status (first-time buyer, additional property, overseas)

Current Stamp Duty Rates (England & Northern Ireland)

Purchase Price	SDLT Rate
Up to £250,000	0%
£250,001–£925,000	5%
£925,001–£1.5 million	10%
Over £1.5 million	12%

First-time buyers enjoy 0% up to £425,000, and 5% on the remaining portion up to £625,000

Common Misconceptions About Stamp Duty

•  “I’ll need to pay stamp duty when I sell”
  False – Stamp duty is only paid by the buyer.

• “Stamp duty applies to all property transactions”
  Only to those above the  current thresholds

• “I can get a stamp duty refund if I sell quickly”
  Stamp duty refunds are rare and only apply in specific circumstances

Does Stamp Duty Affect Selling a Property?

Indirectly, yes

• High SDLT rates may reduce demand in higher price brackets
• Buyers may negotiate lower prices to accommodate their stamp duty liability
• Sellers should consider strategic pricing to enhance market appeal

What Costs Should Sellers Expect?

While you don’t pay stamp duty, expect:

• Estate agent fees
• Conveyancing solicitor fees
• Mortgage exit fees (if applicable)
• Home staging and marketing costs

It’s worth noting that no SDLT for sellers is a benefit to factor into your pricing and negotiation strategy.

How to Prepare for a Property Sale

1. Set a realistic asking price
2. Work with experienced agents like Parkgate
3. Understand potential buyer tax obligations
4. Plan ahead for Capital Gains Tax
5. Get your paperwork in order

A smooth sale depends on knowing both your responsibilities and your buyer’s concerns

FAQs

1. Do I pay stamp duty when I sell my house?
No, stamp duty is paid by the buyer

2. Can stamp duty affect how quickly my house sells?
Yes, especially for higher-value properties where buyers face larger SDLT bills

3. Is stamp duty payable on inherited properties?
Only if you buy the property, selling an inherited property doesn’t incur SDLT, though CGT may apply

4. Can I claim a stamp duty refund?
Only in rare cases, such as if you sell your main home within 36 months of buying a new one and pay the higher SDLT rate

5. Do first-time buyers pay stamp duty?
Not on homes worth up to £425,000 in England and Northern Ireland

6. What’s the difference between SDLT, LBTT, and LTT?
They are regional equivalents:

• SDLT: England & NI
• LBTT: Scotland
• LTT: Wales

Conclusion

To sum up: You don’t pay stamp duty when you sell your house, but understanding how SDLT affects buyers can help you price your property appropriately and anticipate market dynamics. Whether you’re an existing homeowner or exploring selling options, knowing the rules, rates, and reliefs gives you a strategic advantage