WA Quick Guide to Stamp Duty
What is Stamp Duty?
Stamp Duty Land Tax is a tax paid on all properties purchased in England and Northern Ireland and is payable on both residential and non residential land and properties. In Scotland it’s called Land and Buildings Transaction Tax and in Wales it’s known as Land Transaction Tax.
Is there a threshold for paying Stamp Duty?
Up until 8th July, SDLT threshold was £125,000 for residential properties and £150,000 for non-residential land and properties (thresholds may differ in Scotland and Wales). However, the Chancellor has announced a temprorary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland until 31 March 2021.
What has changed?
If you complete on a main residence between 8 July and 31 March, you will not pay any stamp duty on your purchase. If your property is worth more than £500,000, you will only pay tax on the value of the property above that amount. This means an average saving of around £4,500 per house sale , with buyers saving up to £15,000 if they buy a property worth £500,000 or more.
How much do I have to pay?
If you buy a property worth under £500,000 you won’t pay any stamp duty. If your new home is worth more than that you can find out how much Stamp Duty you have to pay online using the Government’s Stamp Duty Land Tax (SDLT) calculator. It’s important to note that stamp duty is paid upon completion, therefore if you’ve exchanged contracts but not yet completed, you can still benefit from this saving.
How do I pay?
If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion and add the amount to their fees. They’ll also claim any relief you’re eligible for, such as if you’re a first-time buyer. If they don’t do this for you, you can file a return yourself and make the payment yourself online, by CHAPS, at your bank or building society, by BACs or by cheque.
How long do I have to make the payment?
You must send an SDLT return to HMRC and pay the tax within 14 days of completion. You may be charged penalties and interest if you fail to do so within this time.
Further information about Stamp Duty can be found by clicking on the links within this article, which will take you to the relevant pages on the Government’s website.
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