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This content applies to Scotland only.
Housing laws vary between Scotland and England. This page applies to Scotland only. Get advice relating to England
When you buy a property, you may need to pay a tax called stamp duty. You will also have to pay charges to register or record your ownership of the property, and to register or record the standard security.
Stamp duty
Please note that from 3 September 2008 until 3 September 2009, there will be no stamp duty payable on transactions of residential property valued up to £175,000. After which the stamp duty payable will return to the amounts in the table below
When you buy a property, depending on its price, you may have to pay a tax called stamp duty (also known as 'stamp duty land tax'). You pay this to your solicitor, who then passes it on to the Inland Revenue on your behalf. You'll have to give your solicitor money to cover the stamp duty before you get the keys to your house. It's important to realise that your solicitor will not be able to officially register your ownership of your new house until you pay the stamp duty.
You'll also have to sign a form (called a Stamp Duty Land Tax or SDLT form) that your solicitor has to send to the Inland Revenue along with the money to pay your stamp duty. You'll have to sign the form whether you are paying stamp duty or not.
How much is stamp duty?
How much stamp duty you pay depends on the price of the home and where it is. In 2001, the government designated some areas of the UK 'disadvantaged areas'. If you are buying a home in one of these areas, you won't need to pay any stamp duty if the property costs £150,000 or less. In other areas, you won't need to pay stamp duty if the property costs £125,000 or less.
You only need to pay stamp duty on the cost of the property itself. The cost of any fittings and fixtures you are purchasing should be deducted from the price.
Go to the Inland Revenue website to:
- use the disadvantaged areas postcode finder to find out whether the property you are buying is in a disadvantaged area
- find out how much tax you will have to pay using the stamp taxes calculator.
You can also see a here. Bear in mind that new postcodes are created all the time, and the list may not be up to date. If in doubt, call the Stamp Taxes Helpline on 0845 603 0135 or ask your solicitor.
The table below shows how the rate of stamp duty differs depending on the cost of the property and whether or not it is in a disadvantaged area.
| Rate | Cost of home in disadvantaged area | Cost of home in other area |
|---|---|---|
| 0% | £0 - £150,000 | £0 - £125,000 |
| 1% | Over £150,000 - £250,000 | Over £125,000 - £250,000 |
| 2% | Over £250,000 - £500,000 | Over £250,000 - £500,000 |
| 3% | Over £500,000 | Over £500,000 |
So, for example:
- if you buy a home for £125,000, you will pay no stamp duty
- if you buy a home for £200,000, you will pay 1% in stamp duty = £2,000.
Zero-carbon homes
From October 2007, if you buy a 'zero-carbon' home, you won't have to pay stamp duty unless the property costs £500,000 or more. If you buy a zero-carbon home costing more than £500,000, you'll get a reduction of £15,000 on stamp duty. A zero-carbon home is an energy-efficient home. To get a stamp duty exemption or discount, the home must be inspected by an independent assessor and issued with a zero-carbon certificate.
Registration/recording fees
You will also have to pay a charge:
- when your solicitor registers your ownership of the property in either the Land Register of Scotland or records it in the Register of Sasines.
- when your solicitor registers the standard security for your mortgage loan
- to register any subsequent standard securities over your home (for example, if you decide to take out a second or subsequent mortgage on your home in the future - see 'registering/recording a standard security' below).
These charges will depend on how much you are paying for your house (or, if you're taking out a second mortgage, how much it's for). If you're still not sure, your solicitor will be able to tell you how much this will cost or you can contact the Registers of Scotland for more information.
You'll have to give your solicitor money to cover all the registration costs before you get the keys to your house. When you get your keys, your solicitor will then pay the costs on your behalf. It's important to realise that your solicitor won't be able to register your ownership of the property until you've paid all the charges in full.
Registering/recording ownership
In order to officially record or register your ownership of a property, the title deeds in your name will have to be either registered in the Land Register of Scotland or recorded in the Register of Sasines. Both the Land Register of Scotland and the Register of Sasines are official records of who owns property in Scotland. Both of them are kept up-to-date by the Registers of Scotland in Edinburgh.
Your title deeds should be sent off to the Registers of Scotland for registration as soon as possible after you've paid the money for your new house and you've got the keys (this is often called 'settlement'). If you have a solicitor, they should do this for you automatically.
It's important to realise that, until the title deeds in your name are registered or recorded, you are not officially the legal owner of the house. Your solicitor has a duty to register or record your deeds as soon as possible after you get the keys to your house. However, they cannot do this until you have paid all stamp duty and registration charges in full so it's important to pay everything when you are asked to although you can ask for a written breakdown of costs and a receipt if you want.
You should also be aware that there are some practical things that can hold up the registration/recording process. For example, if there is a technical legal problem with any of the deeds, or if very old deeds cannot be found (older deeds which affect your property and are needed for registration/recording are called the 'prescriptive progress'), this could hold up the registration process. However, as long as your deeds have been received by Registers of Scotland, everything should be okay. These are things for your solicitor to sort out and they will keep you updated if there are any major problems. If you have any concerns at all, ask your solicitor who will be able to give you further advice.
You will have to pay to register your ownership of the house. The cost of this depends on how much you are paying for the property. The more you are paying for your house, the more it will cost to register/record your ownership. The charges go up on a sliding scale. Visit the Registers of Scotland to find out how much this will cost.
if you are still unsure, your solicitor will be able to tell you exactly how much this will cost.
Registering/recording a standard security
If you have a mortgage, your solicitor also needs to record or register the standard security. A standard security is the legal name for the lender's mortgage deed, which gives them the right to repossess the property if you default on your mortgage. The effect of the standard security should have been explained to you before you signed it because it's a very important legal document.
