What is stamp duty?
When you buy a land, or a residential property that cost more than £125,000 you pay stamp duty, and this applies whether the property is mortgaged or bought outright. Regardless of whether the property, or land, is purchased by a UK resident, or somebody from oversees, they will have to pay the stamp duty tax.
Fun… or not so fun fact: Originally Stamp duty was introduced to help pay for the war with France in 1694. Despite stamp duty only being a temporary solution, it was so effective it has remained in place to today.
There are many rates of stamp duty, which is dependant on the price of the property.
The money advice service has a great Stamp Duty calculator, where you can easily calculate the Stamp Duty on your residential property purchase in England or Northern Ireland
When you buy additional properties you will have to pay an additional 3% on top of the current rate of Stamp duty. This applies to properties over the value of £40,000.
First time buyers.
There is some relief for first time buyers who pay no stamp duty, as long as the property is worth £300,000 or less. Any thing over this value up to £500,000 and you only pay stamp duty on the remaining amount.
For example, if the house is valued at £400,000, first time buyers only pay stamp duty on £100,000.
If the property is worth £500,000 or more, you do not qualify for first time buyer relief.
If you are married and buying a property together, in order to claim first time buyers relief, you both need to be eligible first time buyers.
You can find out more about Stamp duty or paying your Stamp Duty on the gov.uk website.
If you do talk to an industry professional at Pad Residential regarding Stamp duty, or anything else property related, you can contact us by calling 0161 839 9654.