What is Stamp Duty?
Stamp Duty is a tax you might have to pay if you buy a residential property or a piece of land in England and Northern Ireland. The amount of Stamp Duty depends on the purchase price of the property.
From the 8th July 2020 until 31st March 2021, anyone buying a primary residential property up to the value of £500,000 will have no Stamp Duty Land Tax (SDLT) to pay. This is a temporary boost by the government to help buyers cut the cost of purchasing as a result of the coronavirus pandemic. Below is the SDLT rates payable.
If you buy an additional property, such as a second home or certain buy-to-let properties, you’ll have to pay an extra 3% in Stamp Duty on top of the revised rates for each band up until 31 March 2021.
This rate applies to properties bought for £40,000 or more.
You must have completed your property purchase by 31 March 2021 to qualify for the new revised rates on Stamp Duty. Any purchases completed before the chancellor’s announcement on 8 July 2020 will continue to pay Stamp Duty rates valid at that time.
How Do I Pay Stamp Duty?
Your solicitor will deal with the Stamp Duty return and any payment due, although you can do it yourself. You are responsible for making sure it’s all submitted on time.
If the price of your new home is under £500,000 you must still submit a return (unless exempt) even though you won’t need to pay any Stamp Duty.
When Do I Pay Stamp Duty?
You have 14 days to file a Stamp Duty Land Tax (SDLT) return and pay any SDLT due. If you don’t submit a return and pay the tax within 14 days, HMRC might charge you penalties and interest.
When Is Stamp Duty Not Payable?
There are some circumstances when Stamp Duty is not payable or can be reduced:
- Slightly over rate band. If the price is only just within a higher band, ask the seller or estate agent if they would accept a slightly lower price.
- Transfer of property in separation or divorce. There is no Stamp Duty to pay if you transfer a proportion of your home’s value during separation or divorce.
- Transfer of deeds. If you transfer the deeds of your home to someone as a gift or in your will, the beneficiary won’t have to pay Stamp Duty on the market value of the property.
If you exchange properties with someone else, you will each have to pay Stamp Duty on the property you receive based on its market value.
If you have a question regarding Stamp Duty, you can call on of our team or contact us via the website