
What are the options to help your children get on the property ladder?
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They say their findings show that the tax deters people from moving house putting pensioners off downsizing and blocking access to decent sized, family homes for many people across the country. The study estimates that the level of people moving home would grow by 27% if stamp duty was completely abolished.
Co-author of the report, Professor Christian Hilber, commented on the findings to say; “The key message of our paper is that stamp duty hampers mobility significantly. If you are a young family and you have an additional child, you’ll need an additional room, but the stamp duty is discouraging this kind of move because of the additional cost and lack of available homes to move into.”
As stamp duty becomes a problem for many, from affordability issues to housing mobility problems, we’ve put together some information on what you will need to know about stamp duty if you are planning on buying a house soon. For more information regarding stamp duty, get in touch with a tax adviser or a conveyancing solicitor.
For residential properties costing over £125,000, you will be required to pay stamp duty however for properties under that threshold you will not have to pay any stamp duty on your purchase. If you are planning on buying a commercial property then stamp duty rates are slightly different and you will only pay on properties bought for over £150,000; this also applies to mixed use properties such as shops with a flat above it.
You do not have to pay stamp duty on the day your house purchase completes and you have 30 days to pay but if you don’t pay within that timeframe you will be charged a late payment penalty and interest by HMRC.
On most occasions, if you are using a solicitor for conveyancing services then they will deal with paying any stamp duty for you as long as you transfer the money to them before completion. For any further questions on this, you should get in touch with your conveyancing solicitor.
Last year, the Chancellor Philip Hammond changed the way that stamp duty works by introducing different rates dependent on the price of the house you are buying. The new rates for stamp duty are:
The government introduced these tiered schemes as a way to save people money on the amount of stamp duty they pay on the property they purchase. It is estimated that 98% of people will be better off under the new scheme with only those buying homes over £1.5million ending up paying more in the long run.
If you are buying a second home then you will be required to pay a duty on all residential properties above £40,000. Regardless of whether you keep the home for yourself or buy it to let it out, you will be required to pay an extra 3% on top of the current rates of stamp duty.
So a second house bought for £80,000 would see stamp duty of 3% added whereas a second house bought for £400,000 would have stamp duty of 8%. If you buy a new main residence before selling your old house then you will have to pay stamp duty as you now own two properties.
However, you can request a refund if:
When would I not need to pay stamp duty?
Unless you buy a house for under £125,000, you will have to pay stamp duty on your purchase but there are some occasions when stamp duty is not payable or it can be reduced in some way. This includes:
If you are buying a home and have any questions surrounding stamp duty, we recommend you get in touch with a tax adviser, conveyancing solicitor or estate agent who should be able to answer your queries.