Stamp Duty tax is often overlooked by people buying a new home, but it could add up to be a hefty bill, especially if you are buying a second home or a rental property.
The government introduced changes to Stamp Duty tax which mean that if you are buying a property, you may face a tax bill. For anyone buying a residential property, the tax won’t impact on them unless the property costs £125,000 or over, However, a second home or a rental property faces a charge if the property costs over £40,000.
For second properties between £40,000 and £125,000 the rate of Stamp Duty tax is charged at 3%. For additional properties between £125,000 and £250,000, the rate of tax is 5%. For residential properties, the tax rate is 2%. The maximum rate of Stamp Duty tax is 12%, while buy-to-let and additional property owners will pay 3% more.
If you buy a property and have agreed a price for removal items, like the carpets, curtains and items of furniture, the tax isn’t payable on the amount agreed for the items. It is only payable on the cost of the property and any fixed items like a bathroom suite or a kitchen.
Stamp Duty tax is payable within 30 days of becoming the owner of your new home. If you buy a property which costs between £40,000 and £125,000 and don’t have any tax to pay, you will still have to complete the tax return.
Mortgage advisers learn all about the complexities of Stamp Duty tax on a CeMAP training course, so they are able to assist you with any queries.
