When it comes to purchasing a property in the UK one thing that needs careful consideration is the stamp duty payable.
Stamp duty land tax is the tax due on the purchase of a property.
This can be very specific to your own individual circumstance and that of anyone you’re connected with purchasing (ie your partner or parent typically) so ensure you have spoken to a solicitor ahead and explained any existing property owned by all parties in the transaction to ensure you know fully your tax liability.
This is due on the point of completion and will depend on whether you’re a first-time buyer, the value of the purchase, any previous properties owned and if you’re purchasing the property for buy to let investment.
Let’s look at current Stamp Duty rate
The first-time buyer tax rate
£0-£300,000. 0%
£300,000-£500,000 5%
You own one property or first-time buyer and/or purchase above £500,000 tax rate
£0-£125,000. 0%
£125,000-£250,000 2%
£250,000-£925,000 5%
£925,000-£1,500,000. 10%
£1,500,000+ 12%
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*Additional Property: The additional property rates apply where after the purchase of a residential property (for £40,000 or more) it is not the only residential property you own (or part-own) anywhere in the world, and you have not sold or given away your previous main home. This rule applies to you and your spouse or any other joint owner. If you sell or give away your main home within 3 years of buying your new home you can apply for a refund of the higher SDLT part of the stamp duty charge (3%).
**Note for Non-UK Buyers: An additional 2% stamp duty will be payable for any property completing after 1 April 2021 for Non-UK Buyers if contracts were not exchanged prior to 11 March 2020.
***Always consult your solicitor to confirm the exact stamp duty land tax due as the above guide is meant for information purposes and is not legal or tax advice.
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