Did you know that you must pay HMRC Stamp Duty Land Tax if you buy property or land in England or Northern Ireland? Scotland and Wales do charge property and land tax but at different rates and with different considerations.
In Scotland they call it Land and Buildings Transaction Tax, and in Wales they call it Land Transaction Tax. What all 3 countries is that they all charge buyers a percentage of their land or property value on completion of transaction.
In England and Northern Ireland there’s a threshold on stamp duty for residential properties which differs from commercial properties. You pay stamp duty for a residential property valued at £125k or higher. If it is a non-residential property or land, the threshold is £150k.
This is important to consider before you buy property because it might have a serious impact on your budget. Remember though that you pay stamp duty when you buy and not when you sell land or property.
If you are a first time buyer, there’s good news for you. Since 2017 first time buyers can get stamp duty concession or exemption from properties or land valued at less than £500k. But if you are not a first time buyer, then you need to pay stamp duty if you buy a freehold, a leasehold or if it’s a shared ownership scheme.
Your solicitor who is in charge of all the legal documentation, will pay HMRC stamp duty in your behalf, saving you the complex paper work. But understand that it is your responsibility to pay HMRC for these fees, so your solicitor will include costs incurred after completion.
Are you a first time buyer? If not, do you worry about stamp duty and need some clarity before buying property or land? Please give us a call. One of our conveyancing solicitors will be happy to help.
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