When you buy a home, you don’t just pay for the property itself. There are a number of costs that you need to budget for when buying a property. We have compiled a list of everything you need to know about the stamp duty.
Most people are aware that stamp duty land tax (SDLT) exists, but many have questions about what it actually is and what it means. SDLT isn’t as complicated as many people think, although the rules surrounding it have changed within the last few years, so there is some lingering confusion about what it entails.
The question of what is stamp duty the UK is a common one among first-time buyers. SDLT is a tax that homeowners pay when buying a home that costs £125,001 or more. Stamp duty doesn’t apply to every property purchase, even if it is worth more than £125,000. First-time buyers are exempt from paying stamp duty, and both Scotland and Wales have their own local variants on the stamp duty land tax.
If I’m buying a home, how much stamp duty will I pay? This is one of the first questions that many soon-to-be homeowners have.
Working out how much is stamp duty on a house is easy, thanks to the existence of online calculators. As long as you know the price that you will be paying or expect to pay for your next property, there are numerous websites that can calculate the stamp duty for you.
How to work out stamp duty? If you want to work out how much is stamp duty UK for yourself, then you simply need to consult a chart. Lots of people who would like to know how to work out stamp duty on their own don’t do so because they assume it involves some kind of maths. On the contrary, if you want to know: what is the stamp duty rate on a property, then all you need to do is determine which of the following bands the property falls into:
Remember that stamp duty is a tax on the money that you pay for a property; it is not tied to the value of the property itself. If you want to know how much stamp duty on a house that you want to buy, you need to know what the asking price is. Let’s look at an example to make things easier.
If you are buying a new house, but it’s not the first home you have owned, and you are paying £275,000 for it, your stamp duty is calculated as follows:
Of course, every homebuyer wants to know how to avoid stamp duty on a house purchase. While it is not always going to be possible, here’s how to avoid stamp duty on a second home under certain scenarios.
As long as you are buying this second house while also selling your current house, you will only have to pay £3,750, as per the calculation above. However, if you are purchasing this second home to be a literal second home in addition to your primary residence, or if you are planning on letting the property out once you have purchased it, you will have to pay more. If you are buying additional residential properties to your primary residence, you will be charged an extra 3% stamp duty for each band. There are exceptions to this rule for things like mobile homes and caravans.
If there is an overlap in your ownership of your new home and the home that you are selling or have sold, you may have to pay the higher rate of stamp duty. However, as long as you sell your primary residence within three years of purchasing a new home, you can apply for a refund on your stamp duty.
First-time homebuyers in England and Northern Ireland are exempt from paying stamp duty on the first £300,000 of their first property. If the property costs less than £300,000, there is no stamp duty to pay. Anything above £300,000 is subject to SDLT. So, if a first-time property costs £500,000, the buyer will pay the same stamp duty as a £200,000 property.
Located in the affluent London borough of Kensington, Bayswater is a diverse and densely populated area that is popular with…
Knightsbridge is a residential district located in central London, to the south of Hyde Park. The close proximity of the…
Paddington is one of the best areas in London to live and work. Recent developments including the Paddington Waterside development…
Located just a short walk away from the busy Kensington High Street and Notting Hill areas, Holland Park is a…
Chelsea is one of the most desirable locations in the city of London, with amazing houses and mansions, modern apartment…