A beginners guide to Stamp Duty!
Let’s be honest, Stamp Duty is a maze and unless you deal with the tax daily, it can quite often be a struggle to get your head around. In a nutshell, Stamp Duty is a tax paid by the purchaser on the day the purchase legally completes. Your solicitor or conveyancer will usually handle the payment of the tax on your behalf!
How do I work out what I will need to pay in Stamp Duty?
Currently, if you are buying at £500,000 or lower, complete before the 1st July and this is your only residential property then your stamp duty bill will be ZERO! Anything over £500,000 you will pay a tax at a % rate of the proportion over £500,000 until the next threshold kicks in.
What are the current thresholds? (Up to 1st July 2021)
The amount between £0 & £500,000 – 0%
The amount between £500,001 & £925,000 – 5%
The amount between £925,001 & £1,500,000 – 10%
The amount over £1,500,001 – 12%
I’m buying a second home, does this increase my tax bill?
Yes – you’ll pay an extra 3% on top of what you would have ordinarily paid. With the current levels of thresholds in place, you’ll still benefit from the stamp duty holiday by completing a purchase before the 1st July or 1st October.
You keep saying before the 1st July… why is that?
The Government have provided recent changes to the stamp duty thresholds. After the 1st July, the amounts look like this:
The amount between £0 & £250,000 – 0%
The amount between £250,001 & £925,000 – 5%
The amount between £925,001 & £1,500,000 – 10%
The amount over £1,500,001 – 12%
What happens on or after the 1st October?
The stamp duty thresholds will return to there original rates, just like the below:
The amount between £0 & £125,000 – 0%
The amount between £125,001 & £250,000 – 3%
The amount between £250,001 & £925,000 – 5%
The amount between £925,001 & £1,500,000 – 10%
The amount over £1,500,001 – 12%
I’m a first-time buyer, do I receive a discount?
YES! If your purchase is below £300,000, you’ll receive a total exemption meaning your stamp duty bill will be £0.
We hope you have found this guide useful, we’re local property experts and love to help people move. If you have any questions on Stamp Duty then get in touch with us.
We’ve put together this easy to digest infographic to show the different costs depending on when you complete your purchase.
