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Stamp duty on a £400,000 house is £0 for first-time buyers or £10,000 for home movers.
Stamp Duty Summary
| Buyer Type | Stamp Duty | Effective Rate |
|---|---|---|
| First-time buyer | £0 | 0% |
| Home mover | £10,000 | 2.5% |
| Second home/BTL | £22,000 | 5.5% |
How Stamp Duty is Calculated
Home Movers (Standard Rates)
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 - £125,000 | 0% | £125,000 | £0 |
| £125,001 - £250,000 | 2% | £125,000 | £2,500 |
| £250,001 - £400,000 | 5% | £150,000 | £7,500 |
| Total | £10,000 |
First-Time Buyers
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 - £425,000 | 0% | £400,000 | £0 |
| Total | £0 |
Second Home / Buy-to-Let (3% Surcharge)
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 - £125,000 | 3% | £125,000 | £3,750 |
| £125,001 - £250,000 | 5% | £125,000 | £6,250 |
| £250,001 - £400,000 | 8% | £150,000 | £12,000 |
| Total | £22,000 |
Total Purchase Costs at £400K
| Cost | First-Time Buyer | Home Mover |
|---|---|---|
| House price | £400,000 | £400,000 |
| Deposit (10%) | £40,000 | £40,000 |
| Stamp duty | £0 | £10,000 |
| Solicitor | £2,000 | £2,000 |
| Survey | £700 | £700 |
| Total upfront | £42,700 | £52,700 |
FTB Savings at £400K
First-time buyers save £10,000 compared to home movers — a significant advantage.
| Comparison | FTB | Home Mover | Difference |
|---|---|---|---|
| Stamp duty | £0 | £10,000 | £10,000 saved |
| Effective rate | 0% | 2.5% | 2.5% saved |
Impact on Deposit Requirements
That £10,000 stamp duty saving could mean:
- Buy with 7.5% deposit instead of 10%
- Have bigger emergency fund at move-in
- More budget for renovations/furniture
Home Mover: Selling to Buy
If you’re selling a property to buy at £400K:
| Item | Amount |
|---|---|
| Sale price (existing home) | £300,000 |
| Estate agent (1.5%) | -£4,500 |
| Solicitor (sale) | -£1,000 |
| Net proceeds | £294,500 |
| Less: Mortgage balance | -£150,000 |
| Equity to use | £144,500 |
From £144,500 equity, allocate:
- Deposit (10%): £40,000
- Stamp duty: £10,000
- Purchase costs: £2,700
- Buffer: £91,800
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