What is stamp duty?

 

Stamp Duty was replaced by Stamp Duty Land Tax in December 2003 as the main taxation levied on the purchase of land in the UK. As such, whenever you buy a property or piece of land in the UK, you may be obliged to pay Stamp Duty Land Tax, which is still commonly referred to simply as ‘stamp duty’.
 
There are a number of thresholds which determine your liability to pay stamp duty, as well as the level of taxation you will be expected to pay. The thresholds relate to the value of the property or land being purchased.
 
So for example, if you are buying land or property and paying less than £125,000 then you will not be expected to pay any stamp duty. 
 
The thresholds for the purchase of land are as follows:
 
  • £0 - £125,000 and you pay no stamp duty
  • £125,001 to £250,000 - you pay stamp duty of 1% of the property price
  • £250,001 to £500,000 - you pay stamp duty at 3% of the property price
  • £500,001 to £1,000,000 - you pay stamp duty at 4% of the property price
  • Over £1,000,000 - you pay stamp duty at 5% of the property price
If you are a first time buyer, you are exempt from paying stamp duty on property up to £250,000. The thresholds for stamp duty on property purchasing are as follows:
 
  • £0 - £250,000 and you pay no stamp duty
  • £250,001 to £500,000 and you pay stamp duty at 3% of the property price
  • £500,001 to £1,000,000 and you pay stamp duty at 4% of the property price
  • Over £1,000,000 and you pay stamp duty at 5% of the property price
Stamp duty relief is available for property purchased in some areas classed as disadvantaged. This allows you to avoid stamp duty on property up to the value of £150,000, extending the normal exemption in these circumstances. 
 
It is also possible to gain relief on carbon neutral homes. This aspect of the scheme was introduced in 2007 and allows you to avoid any stamp duty on property up to £500,000 and at a reduced rate on more expensive property, if it is carbon neutral.
 
If you would like to obtain legal advice stamp duty, Caven can put you in touch with a local specialist solicitor free of charge. So, if you have any questions or would like our help in finding local solicitors please call us on 08001 221 2299 or complete the web-form above.
 
 
 
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