Ison Harrison Solicitors, a leading conveyance solicitors in Yorkshire know only too well how complicated Stamp Duty can be. They offered to write this guest blog for House Moving Solutions to try help you make sense of stamp duty.
Here is what they have to say….
Whether you’re a first time buyer or you’re investing in an additional property, navigating the rules relating to Stamp Duty can be tricky. Although you’ll only make a single payment, the amount varies depending on your circumstances. Here, we review the rules and how they apply.
I’m a First Time Buyer: What are the Rules?
To be defined as a first time buyer you must have never owned or inherited a property, in the UK or elsewhere. All parties purchasing the property must be classed as first time buyers in order to benefit from the lower rates.
Broadly speaking, the rules are as follows:-
- If you’re purchasing a property for £300,000 or below, you won’t need to pay Stamp Duty;
- You’ll then pay 5% on the portion from £300,001 to £500,000 (e.g. if you’re buying a property for £315,000 then you’ll pay £15,750.00);
- If you’re paying in excess of £500,000 for the property, you’ll be charged the same rates that apply to second home purchases- see below.
I already own a home but want a Buy-to-Let property: will I need to pay extra Stamp Duty?
Yes. It’s the purchase of the additional property that counts. Put simply, if you already own a house but want to buy another, you will have to pay extra.
If you’re replacing your main home then you will pay Stamp Duty at the normal rates- there will be no additional cost.
How much is the additional Stamp Duty?
As with Stamp Duty generally, a tiered system operates, as shown below.
Property cost Stamp Duty
£40,000- £125,000 3%
£125,000- £250,000 5%
£925,000- £1.5m 13%
If the additional property is being bought for less than £40,000, there will be no additional Stamp Duty to pay.
Purchasers of holiday homes need to be aware of the rules too, even if ownership is to be shared amongst a handful of people.
I’m replacing my main residence, but I will own two properties for a short time- am I still liable?
Unfortunately yes- but there is a silver lining. Once your old property has been sold, you have three months to apply to HMRC for a refund of the additional sum (or within 12 months of the filing date of your self-assessment tax return.)
Your previous main residence must have been sold within 3 years of paying the higher rate of SDLT.
Who is responsible for paying Stamp Duty?
Legally speaking you are, as the purchaser. On a practical level, your conveyancer will notify you in advance as to how much you need to pay. You’ll then include the sum in the monies you send to your conveyancer before contracts are exchanged, and they will send the money to HMRC when your purchase has completed.
For more information on Stamp Duty, speak to one of Yorkshire’s leading conveyancing firms Ison Harrison. Visit the website here: https://www.isonharrison.co.uk/
Thank you for reading and I hope this helps!
If you are struggling to manage your house move then get in touch with House Moving Solutions, a one stop shop house move management company based in Yorkshire who can assist with everything from decluttering and home staging to managing suppliers and your house move on the day itself. With a range of services to suit every need contact us for your free consultation today!