When you’re buying a new home, you will be required to pay an amount of Stamp Duty Land Tax. Stamp duty is the biggest tax homebuyers face, and is payable by you when you sign the contract, but what exactly is it?
What is stamp duty?
Stamp duty is an ancient tax charged on any land or property transaction. The rate you’ll pay depends on the price and type of property you are buying, but could add thousands to the cost of buying a home
What rate do I have to pay?
For residential properties, stamp duty is charged on the whole property price, and therefore charged at different rates. Ultimately, the more you pay for a property, the more tax you will have to pay.
As it stands, rates are currently charged according to the scale below:
- Up to £125,000 – 0%
- £125,001 – £250,000 – 1%
- £250,001 – £500,000 – 3%
- £500,001 – £1 million – 4%
- Over £1 million – £2 million – 5%
- Over £2 million – 7%
When do I have to pay it?
Stamp duty is usually payable 30 days after the day of completion. Your solicitor will ensure that you are aware of the payment deadline and ensure you don’t miss it.
How do I pay?
Your conveyancer will guide you through the process and we will usually handle the payment of stamp duty on your behalf, but ultimately, you are legally responsible for ensuring the right amount of tax has been submitted to HMRC.
For friendly and down to earth advice on stamp duty and any part of the conveyancing process, get in touch with a member of the Peter Robinson & Co. team today.