Stamp Duty explained: Buying a property? First time buyers need to understand that if you’re getting ready to purchase your first home, you’ll need to get the lowdown on stamp duty property fees.
Stamp duty is a tax paid when you purchase property or land. Rather than being one fixed sum, the amount paid will vary from one property to another, so if you’re torn between two or more homes, this is an important consideration to factor in to your decision making. The required amount of stamp duty to be paid is determined by the value of the land or property you are purchasing and your status as a buyer, which can often lead to confusion.
To help you find out what you could be liable to pay (if anything), follow this easy to understand guide. This will help you to avoid any nasty shocks when it comes to paying the other fees associated with your property purchase.
How much is stamp duty?
The amount of stamp duty you pay depends on the value of the property or land you’ll be buying, but the good news is that the first £250,000 of any primary property is ignored in the UK and you’ll pay nothing in stamp duty.
Any amount over £250,00 attracts a percentage fee starting at 5% for properties sold between £250,001 and £925,000. This rate increases to 12% on properties sold for over £1,500,000.
However, these percentages only apply if this is your primary property. If the day comes when you are ready to add a second property, you will be required to pay 3% of the total purchase price for that additional residence or land.
Do first-time buyers pay?
To help first-time buyers get on the property ladder, properties sold for up to £300,000 in the UK do not attract stamp duty. This is excellent news if you are about to get the keys to your very first home.
Keep in mind however, if you are purchasing a first property for more than £300,000 the first time buyer stamp duty threshold does not apply and you’ll be required to pay 5% of the purchase price.
When must stamp duty be paid?
In England, you have up to 14 days after completing on the purchase to pay any required stamp duty. Failure to pay within that two-week deadline can result in a hefty fine.
Can I add stamp duty fees to my mortgage?
If you are liable to pay stamp duty fees, it is possible to add this amount to your mortgage on the property.
However, it’s worth remembering that this will increase your repayments and you’ll be paying interest on the amount of stamp duty that you add, so it does make more financial sense to avoid doing this if at all possible.
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