Looking to buy a house in England, but are thrown off by stamp duty?
Dating back to 1694, this tax is far from a new thing, but as property law changes, you need a legal conveyancing team that is up to date with its nuances.
At Andrew and Andrew, our conveyancing solicitors Portsmouth can help you to make sense of stamp duty, other property taxes and the entire buying process if you are a first-time buyer. We pride ourselves on clarity and aim to empower our clients to make the best decisions for themselves and their families, especially when it comes to something as large as the purchase of a house!
What is stamp duty? Our conveyancing solicitors Portsmouth offer the following brief guide for you to browse through. Enjoy!
What is stamp duty?
Stamp duty is a fee or a tax that you pay to HMRC when you purchase a property that is worth over a certain price.
While it can seem like a straightforward process, our conveyancing solicitors Portsmouth can help you should you ever become stuck with the rates or other intricacies that surround this tax.
England and Northern Ireland; stamp duty rates
This can be quite tricky to calculate and, as each property is different, you will need to put the following numbers into your own equations to work out the rates that you will pay.
Suppose you have purchased a property for £500,000.
Up to £125,000, you pay nothing.
On the portion between £125,000 and £250,000, you pay 2%.
On the portion between £250,000 and £500,000, you pay 5%. So, for a property worth £500,000, you pay £15,000 in stamp duty.
I’m a first-time buyer – do I need to pay it?
This depends on the price of your property.
For first time buyers, the first £300,000 is Stamp Duty free. After this, on properties worth £300,000 – £500,000, you pay 5%. But, should your first property be worth over £500,000, then you pay the same rates.
What rate will I pay?
As mentioned, this will depend on the price of the property you are buying, whether you are a first-time buyer and will vary depending on where you are located.
Remember, if you get stuck trying to work out the amount of Stamp Duty you will need to pay, you can contact our team at Andrew and Andrew for advice.
Can I add the stamp duty to my mortgage?
You may be able to, depending on the lender who is offering you the mortgage, but it is often best if you don’t.
Doing so can result in a higher interest rate and a higher price in the long term when you are paying the mortgage back. It can also affect the offers open to you in the future if you want to borrow against your home.
As before, if you need any help with clarification around stamp duty and mortgages, contact our team.