When buying a home you will have to meet a variety of costs. Amongst the expenses you might expect, such as solicitor’s fees and the fees payable for a mortgage valuation, there is another cost, sometimes overlooked. It is Stamp Duty Land Tax (SDLT).

 

The Government recently introduced relief for first time buyers purchasing a home on or after 22 November 2017. Click here to find out more

 

Stamp Duty is a charge levied in England and Wales by the Government and the cost of Stamp Duty is payable by the purchaser. It is a charge levied on all property transactions over certain transactional values.

In recent years Stamp Duty has grown from being a relatively small charge to become a significant tax in its own right. The regulations around it have also become more complex as a result.

Until recently, Stamp Duty on the purchase of property was payable in tiers. Any property purchased for less than £125,000 was effectively exempt. Stamp Duty was also payable on the purchase of residential or commercial property at the same rate. This changed in December 2014.

A purchaser buying property for between £125,000 and £250,000 used to pay 2% Stamp Duty on the total purchase price and anyone that purchased property over £500,000 paid 4% of the total purchase price in Stamp Duty.

The Government recently changed the way Stamp Duty is calculated and for most people buying homes with a value up to £500,000 or so, this is good news. At the time of writing the cost of SDLT is calculated as follows for individuals purchasing Freehold residential property:

You’ll pay:
• nothing on the first £125,000 of the property’s purchase price
• 2% on the next £125,000
• 5% on the next £675,000
• 10% on the next £575,000
• 12% on the rest (above £1.5 million)

If you have exchanged contracts to purchase on or before 3. December 2014 and have yet to complete the purchase there are transitional arrangements. There are also different rules for leases with a value of more than £125,000, corporate bodies, commercial transactions and linked transactions. Instead of SDLT, Land and Buildings Transaction Tax is payable in Scotland. For more details go to www.gov.uk/stamp-duty-land-tax or consult your solicitor.

Download our Free First Time Buyers Guide

Recent posts

The average seller’s asking price dropped by 0.4% in July, a bigger drop than we have typically seen. 

We explore the differences between Millennials and Gen Z and what both generations ideally want from a new home.

Should you overpay your mortgage? If you can put extra cash away you need to seriously consider whether you should pay more off on your mortgage or put it into a savings account.

Buying a property, especially in the current climate, is a big decision for first time buyers. We have listed a few tips that can help you buy your first propertyy

Does the time of year make a difference in house purchases? The answer is, yes and no.

The popularity of buying a house can vary depending on various factors such as regional trends, how the economy looks, and of course personal circumstances. 

If you are looking at putting your house on the market, you may want to consider giving your garden some TLC. Small changes can make your outside space a lot more attractive to potential buyers resulting in a faster sale.

Getting on the property ladder is a big milestone in life, and is not something to take lightly. There are several things to take into consideration such as saving up for a deposit, finding your dream home, and finding the best mortgage product to suit you. Here we look at UK first time buyer statistics.

If you are struggling to get over the hurdle of saving enough deposit due to being in a rental property, but wish to purchase your own home, you may be able to with a 100% mortgage. You will need to meet certain requirements and be financially stable.