Stamp duty when you downsize
Two things surprise downsizers about stamp duty: that there's no relief for them at all, and that buying the new home before selling the old one triggers a 5% surcharge on the whole price. Both are worth knowing before you plan the order of the move.
Interactive: stamp duty
Stamp duty on your next home
England and Northern Ireland. Includes the surcharge that applies if you complete the purchase before your sale, and the slice of it you can claim back.
Will the purchase complete before your sale?
Stamp duty payable
£20,000
How it's made up
- 0% on £0–£125,000£0
- 2% on £125,000–£250,000£2,500
- 5% on £250,000–£600,000£17,500
The commissioning comparison
Stamp duty is charged on what you pay for. So buy a serviced plot at around £240,000 and build, and the duty is £2,300 instead of £20,000: a saving of £17,700. The build cost is never taxed.
01The rules that matter
Three things downsizers need to know
There is no downsizer relief
A stamp duty exemption for downsizers gets floated in the press most years, and has never been enacted. Nor is there any age-related discount: a downsizer in their seventies pays exactly what anyone else pays on the same purchase. Treat the calculator's figure as a hard cost of the move, and treat any article promising relief as speculation until HMRC says otherwise.
Buying before selling costs 5% extra, temporarily
If your purchase completes while you still own your old home, you own two dwellings on completion day and the additional-property surcharge applies to the entire purchase price. Sell the old home within three years and you can reclaim the surcharge in full from HMRC. The claim is made online, usually refunded within weeks. The cash-flow hit is real, though: on a £600,000 purchase you'd find £30,000 extra up front.
Duty follows the price you pay, not the home you end up with
This is the rule downsizers can actually use. Buy a finished £600,000 house and duty is charged on £600,000. Buy a £240,000 serviced plot and spend £360,000 building on it, and duty is charged on £240,000; the build is never taxed. Same total spend, five-figure difference in tax, and you get a home designed around you rather than around a developer's standard types.
02Worked examples
The same move, three ways
| Route | Duty charged on | Stamp duty |
|---|---|---|
| Buy a £600,000 home, selling first | £600,000 | £20,000 |
| Buy the same home before your sale completes | £600,000 + surcharge | £50,000 up front, £30,000 refundable |
| Buy a £240,000 plot and build a £360,000 home | £240,000 (the plot only) | £2,300 |
England and Northern Ireland rates. The plot route assumes the land is bought as residential; classification is fact-sensitive, so confirm with a conveyancer. On some plots the non-residential rates produce an even lower figure.
03Common questions
Stamp duty, answered
Do pensioners pay stamp duty?
Yes. There is no age-related exemption or discount for stamp duty in England and Northern Ireland. A 70-year-old downsizer pays exactly the same as a 30-year-old buying the same home. Budget for it as a hard cost of the move.
Is there a stamp duty relief for downsizers?
No. A downsizer relief has been floated in policy discussions for years but has never been enacted. The only stamp duty reliefs in force are first-time buyer relief and a handful of specialist ones; none apply to downsizing. Anything you've read suggesting otherwise is speculation, not law.
What if I buy my new home before selling the old one?
You'll pay the 5% additional-property surcharge on the entire purchase price, because on completion day you own two homes. You can reclaim the surcharge from HMRC if you sell your previous main residence within three years of the purchase. The calculator above shows both the up-front figure and the refundable slice.
How do I reclaim the surcharge after I sell?
Apply to HMRC within 12 months of selling your previous main home (or within 12 months of the filing deadline for the return, if later). It's done online or by post using HMRC's 'Apply for a repayment of the higher rates of SDLT' service, and refunds typically arrive within a few weeks.
How does stamp duty work if I buy a plot and build instead?
Stamp duty is charged on what you pay for the land, not on the value of the finished home. Buy a £240,000 serviced plot and build a £360,000 home on it, and stamp duty is due on £240,000 only; the build cost is never taxed. Compare that with buying an equivalent £600,000 finished house and the saving is usually five figures.
Does this calculator cover Scotland and Wales?
No. It covers England and Northern Ireland, where SDLT applies. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax, both with different bands and surcharge rules. Use Revenue Scotland's or the Welsh Revenue Authority's own calculators for those.
Disclaimer
About the estimates on this page
The interactive tools on this page produce estimates for planning purposes only. They are not financial, tax, legal, mortgage or investment advice, and they are not a substitute for professional advice on your specific situation.
Rates, thresholds and typical costs change frequently. Always verify current figures before making decisions or committing money:
- Stamp Duty Land Tax: figures cover England and Northern Ireland. Confirm bands, the additional-property surcharge and refund rules with HMRC's official SDLT calculator and your conveyancer. Scotland (LBTT) and Wales (LTT) use different bands and rules entirely.
- Moving costs: agent fees, conveyancing, removals and survey defaults are indicative national figures. Get real quotes; they vary widely by region, property and firm.
- Running costs: energy and maintenance figures are rough comparison rates by EPC band and property age, not predictions of your bills. Energy prices in particular move with the Ofgem price cap.
- Build costs: £/m² ranges are based on published industry averages and vary substantially with specification, region and build route. Floor areas reference the Nationally Described Space Standard.
- Equity release: a regulated financial product. Nothing on this page is advice about it; speak to an FCA-regulated adviser specialising in later-life lending before considering it.
- The readiness check: a structured way to think, not an assessment of you. Big decisions deserve conversations, not just scores.
Livedin accepts no liability for decisions made on the basis of these estimates. Always take qualified advice before selling, buying, building or relying on a financial calculation.
The right smaller home might not be for sale yet
See how downsizers commission exactly the home the market won't supply: serviced plots, single-storey living, and stamp duty on the land alone. Free to browse.