All You Need To Know About Stamp Duty

STAMP DUTY 

What is it?

Stamp Duty Land Tax (SDLT) is the amount you're required to pay if you buy a property or land which is over the current threshold in England, Northern Ireland or Wales. SDLT is not applicable to property in Scotland anymore; instead they pay Land and Buildings Transaction Tax. 

The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential properties or land. SDLT is permitted to both leasehold and freehold properties whether they're bought straight out or are on a mortgage. However, the more expensive your property costs - the higher your SDLT will be. 

Costs

If your property costs less than £125,000 than you escape paying SDLT however after this, the higher the price of your property; the more tax you start to pay. The current rates are as follows:  

How to pay

To pay Stamp Duty Tax you must submit the correct form and pay whatever amount you owe within 30 days of completion. However, in the 2017 tax year the amount of time to file and pay tax will be reduced to 14 days. 

If your new property cost less than £125,000 it won't be necessary for you to pay SDLT however you will still need to submit a return.

SDLT return and payment is usually dealt with by your solicitor during the transition of moving into your new home therefore it is unlikely everyone will need to deal with this. On the other hand, it's important to be aware of how much you need to pay (if you do) so your in control of your finances.

If you don't pay your SDLT on time - you will be charged £100 interest.

When you don't pay

• You obviously won't pay SDLT if your property is under £125,000 - however, this is becoming more and more uncommon as property prices are on the rise
• If your property only just enters the higher band - e.g.: if your property is £127,500 - you could bid a lower price to escape SDLT
• If you divorce your spouse and split the home value with them, you don't need to pay SDLT on this halve
• If you give your property to someone - this could be as a gift or from somebody's will - than they won't need to pay SDLT on the property's value
• You don't need to pay SDLT on a freehold land or property transaction that has a total chargeable consideration lower than £40,000.