Buying your first home is an exciting time, especially if it has been on your bucket list for a while!
If you are set to buy your first home in 2022, you may have to pay Stamp Duty Land Tax (SDLT), which if you were not prepared for it, can be a bit of a headache and can certainly add to your stress.
Stamp Duty is, as the name suggests, a land tax that you are required to pay on properties over a certain value and it applies to both freehold and leasehold properties. However, if you are buying your first home and have a solicitor to help you with the paperwork, they will certainly help with explaining the technicalities and jargon that you need to know.
If you have chosen to work without our conveyancing solicitors Portsmouth at Andrew and Andrew, we will explain every step of the buying process to you, ensuring that you are aware of all the associated costs. Great!
In the following FAQ, our conveyancing solicitors Portsmouth answer common queries that we receive about stamp duty, so read on to learn more!
I’m buying my first home – how much will the Stamp Duty be?
According to our conveyancing solicitors Portsmouth, the rates on buying the first property differ from when you are adding a property to a portfolio. So, from October 2021, if you are buying your first property, you will pay no Stamp Duty on properties that cost up to £300,000. If your first property is worth up to £500,000, then you will pay a discounted rate, which our team will work out for you.
I’m looking to buy a second home; what percentage of Stamp Duty will I need to pay?
The standard rate for Stamp Duty is 2% on properties worth £125,001-£250,000 and 5% on properties worth between £250,001 and £350,000. If you are purchasing a second property, you will be required to pay an additional 3% Stamp Duty on properties costing over £40,000. Once again, our team at Andrew and Andrew can help with all aspects of paying stamp duty.
I’m moving from England to Scotland to buy a home; will I still need to pay Stamp Duty?
Stamp Duty only applies within England, but if you are moving to Scotland or Wales to buy a property, you will need to pay Land and Building Transactions Tax (LBTT) instead of Stamp Duty. The rates are slightly different than in England; in Scotland, there is nothing to pay for first time buyers on properties worth up to £175,00 and in Wales, you pay no LBTT tax if you are a first-time buyer on properties worth up to £180,000.
Can you avoid paying Stamp Duty?
There are some legal loopholes that can help you to avoid paying Stamp Duty, but they are often complicated and costly. For instance, in the last 10 years, more people have been purchasing land and building properties on it; as the property is newly built, it has no pre-existing value and therefore, the buyers and builders do not have to pay Stamp Duty. But building a house from scratch is extremely costly and stressful, so it may be best to just pay the tax!