Stamp Duty is the tax you pay when you buy property or shares. You pay 'Stamp Duty Land Tax' when you buy property and either 'Stamp Duty' or 'Stamp Duty Reserve Tax' when you buy shares.

Stamp Duty Land Tax when you buy property

You pay Stamp Duty Land Tax on property like houses, flats, other buildings and land. If the purchase price is £125,000 or less you don't pay any Stamp Duty Land Tax at all. If it's more than £125,000, you pay between one and four per cent of the whole purchase price.

Residential property - purchase price Rate of Stamp Duty Land Tax

up to £125,000 = 0%
£125,001 - £250,000 = 1%
£250,001 - £500,000 = 3%
£500,001 or more = 4%

Property in disadvantaged areas

If you're buying a property an area designated by the government as 'disadvantaged', you don't pay any Stamp Duty Land Tax if the purchase price is £150,000 or less.

To find out more about Stamp Duty Land Tax, including how you pay it and a link to HM Revenue & Customs' Stamp Duty Land Tax calculator, read our article 'Tax on buying property'.

What happened to 2% - surely £250,001 - £500,000 = 3% should be broken down into 2

Something like

£250,001 - £350,000 = 2%
£350,001 - £500,000 = 3%

Well I think the government is clever here, knowing full well that majority of houses will sell for between 250k and 500k. If they introduced the 2%, many homes in the UK will fall into that category.

The UK government sure knows how to make money from the middle class.