Can you add Stamp Duty to a mortgage?

Can you pay Stamp Duty in instalments?

No, you unfortunately can’t pay Stamp Duty in instalments or spread the cost with a credit card. You must pay your Stamp Duty bill within 14 days of buying a property, or pay a penalty to HMRC.

Can you add Stamp Duty to your mortgage?

Yes, it’s possible to add Stamp Duty to your mortgage. But this means you’ll need to take out a bigger loan to cover both your property purchase and your Stamp Duty charge. Since you’ll be borrowing a larger sum, your mortgage payments will increase and you’ll pay more interest over the course of your mortgage term. Adding Stamp Duty to your mortgage will also result in a bigger loan-to-value ratio (LTV), which could affect the interest rate you’ll be offered.

When is the Stamp Duty paid?

You need to pay Stamp Duty within 14 days of buying a property or piece of land. If you’re using a conveyancer or solicitor, they’ll usually make the payment for you. In some cases, you may not need to pay any Stamp Duty at all. 

Is Stamp Duty increasing?

Yes, the thresholds for paying Stamp Duty on home purchases are dropping from April 2025, which means that more buyers will have to pay Stamp Duty or have a higher tax bill to pay. For first-time buyers, the threshold after which you’ll be liable for Stamp Duty is dropping from £425,000 to £300,000, and anything over £500,000 will be subject to standard Stamp Duty rates. For those moving up the ladder, the threshold for paying Stamp Duty will drop from £250,000 to £125,000.

You can find a full breakdown in our How Stamp Duty is changing in 2025 guide, or take a look at the tables below to compare today’s Stamp Duty rates with the new charges from April. 

Perfect for you: First-time buyer guide to Stamp Duty

What happens if you can’t pay Stamp Duty?

If you can’t pay Stamp Duty within 14 days of buying a property, you may have to pay a penalty. HMRC will also charge you interest daily until you pay the money. The interest will be based on the official rate of interest set by HM Treasury and you cannot appeal against these interest charges.

When is Stamp Duty not payable?

If you’re not a first-time buyer, no Stamp Duty will be payable if you’re buying a residential property worth less than £250,000 in England, Northern Ireland or Scotland, but this figure will fall to £125,000 in April 2025. First-time buyers currently pay no Stamp Duty when buying a home worth up to £425,000, but this threshold will drop to £300,000 in April 2025. This means that a first-time buyer purchasing a home worth £425,000 on the 1st April next year will pay £6,250 in Stamp Duty!

If a loved one is giving you a property as a gift, you usually won’t have to pay Stamp Duty as long as there’s no outstanding mortgage on the property. You usually won’t have to pay Stamp Duty on a property you inherit, even if you’re taking on the mortgage of the person who passed away. There’s no need to submit a Stamp Duty return, but you will need to inform HMRC and in some cases, you may have to pay inheritance tax. 

Take a look at our inheritance tax guide to learn more

Learn more: What are the benefits of an early inheritance?

What is the loophole for Stamp Duty?

There are a few legal ways to reduce the amount of Stamp Duty you pay. These include negotiating with the home seller to reduce the property price - particularly if the property is currently priced just above a particular threshold - as well as paying for fittings and furnishings separately. Buying a home with high-quality fixtures and fittings included may be convenient, but it can result in a bigger Stamp Duty bill. Kitchen units, cupboards, sinks, wall-mounted ovens, and central heating systems are just a few examples of fittings that can add to the property’s value and cost more in tax. If the seller is unwilling to budge on the property price, you could ask them to take certain removable fittings with them or pay for these separately from the property price. 

If you’re buying a new build, ask the home developer if they’ll pay your Stamp Duty bill for you. There’s no guarantee they’ll say yes, but it’s worth a try. According to The Times, one man saved £9,500 in Stamp Duty by convincing the developer to foot the bill for him!  

If you’re buying a house with your partner, you’ll both need to be first-time buyers to qualify for first-time buyer Stamp Duty relief. If you’re buying with someone who is a second-time buyer, you could add them as a guarantor on the mortgage instead of a buyer through an Income Boost! An Income Boost is designed to help first-time buyers get on the property ladder by adding a friend or family member’s income to the mortgage application. It’s particularly useful for single people looking to buy a home with their parents’ help, but couples can use it to reduce their Stamp Duty bill without getting their Mum, Grandad or generous rich Auntie involved.

So how will this work for you? Well, instead of buying the house together as joint owners, the second-time buyer will act as the first-time buyer’s guarantor. Something to consider is that although the second-time buyer will be named on the mortgage, they won’t be named on the property deeds. They also won’t have to contribute towards the monthly payments or the house deposit, unless the first-time buyer is unable to pay these costs themselves. 

Find out more about Income Boosts here

Another possible way to save on Stamp Duty is through a Deposit Loan. Here, the second-time buyer will contribute towards the house deposit in return for a share of the home. Although they’ll have an equity stake in the property, they won’t be classed as a joint owner and that first-time buyer Stamp Duty relief will be protected.