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What is Stamp Duty?

EH SolicitorsBlogWhat is Stamp Duty?

Dec

18

What is Stamp Duty?

This is a form of tax payable after you have purchased land or property that is over a certain price. This is a requirement by the HMRC and failure to which a penalty will take effect and you may have to pay the tax with additional interest. It applies in Northern Ireland, England, and Wales

Stamp duty rates depend on the value of your home – and as of November 2017, first-time buyers may not need to pay.

When you buy a house or flat, you’ll need to pay stamp duty – unless you’re a first-time buyer buying a home for less than £300,000.

Stamp duty is tiered, meaning that you pay different rates on different portions of the property price. You’ll be liable to pay stamp duty when your property sale completes, although you’ll have 30 days to pay the bill. The first-time buyer stamp duty exemption only applies if you’re planning to use the property as your main residence.

To qualify for the first-time buyer stamp duty relief, you must never have owned residential property before. Owning residential property means holding an interest in a dwelling, whether freehold or leasehold. So situations where you may not be a first-time buyer include if you’ve previously:

– inherited residential property

– been gifted residential property

– owned a home but then sold it

– owned a buy-to-let residential property

– owned a share of a property with someone else.

If you’re buying with another person as a joint application, every single purchaser must be a first-time buyer. Otherwise, stamp duty will be payable on the property at the standard rates.