Are you ready to take the next step and buy your own property but you’re not sure about the costs involved?
As a homeowner, there are many things you need to consider before getting the keys to your new property. For instance, there are certain taxes you have to pay, depending on the size and financial value of your residence.
While you might have heard of it, do you know what exactly is stamp duty and how it can influence your home-buying process? We’ve got you covered with the key things to know about stamp duty tax and how to make your house-buying process as smooth as possible.
Stamp duty is the property transaction tax that you have to pay to HM Revenue & Customs if you buy any residential property in England or the Northern Ireland that exceeds £250,000. However, starting from October 2021, you will pay Stamp Duty on residential properties costing more than £125,000, unless you qualify for first-time buyers relief.
If you’re a first-time buyer, you can be exempt from paying the stamp duty if your property costs £300,000 or less. While the discount was introduced in 2007, the first-time buyer relief is not applicable to all properties. For instance, if your property values more than £500,000, then you will not be entitled to any relief and will pay SDLT at the normal rate.
In Scotland, the starting threshold for first-time buyers is £175,000 and the first-time buyer relief doesn’t apply in Wales.
As stated above, the rates for the stamp duty tax differs depending on whether you’re a first-time buyer or not. However, how much you pay is also influenced by whether the land or property is of residential or non-residential use. Additionally, purchasing a second home or a buy-to-let will also influence the amount of money you pay for your stamp duty.
While you are responsible for paying the stamp duty tax on time, you can get your solicitor or conveyancer to pay your stamp duty on your behalf. You have 14 days since buying your property to submit your payment and make sure you don’t have any outstanding bills.
Want to learn more about how much is your stamp duty depending on your circumstances? You can use the HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator to work out how much tax you’ll pay.
According to HMRC, there are a few other situations that can make you exempt from the stamp duty tax. Some exemptions include:
If you are considering buying a property in Manchester, let our conveyancing solicitors take your worries away and make your home-buying process hassle-free.
Through a very stressful process buying a first home, Gorvins were confident and collected. Able to deliver what they promised and kept me updated through the stages. I was glad to have No Stress experience with our conveyancer in amongst the chaos of the rest of it.
Used as recommended by my mortgage advisor for a remortgage. My case was dealt with by Natasha Sands and she made it complete smoothly and to my satisfaction. Communication was great and all my questions answered promptly. Will not hesitate to use again next time.
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I recently instructed Gorvins to act on my behalf in the purchase of 5 apartments in Liverpool. I am happy to report that I was more than pleased with their performance.The services provided by the person in charge of the file at Gorvins was most professional, reliable and efficient. In fact she went out of her way to help in aspects which was not her responsibility and as a result the deal went through smoothly.
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