When you're buying a property in the UK, there are all sorts of different taxes and fees that you need to be aware of. One of the most important (and most expensive) is stamp duty. In this blog post, we'll give you a brief overview of what stamp duty is and how it works in the UK property market. We'll also touch on who typically pays stamp duty and how much they pay, as well as some ways to reduce or avoid paying stamp duty altogether.
Stamp duty is a tax that is levied on property purchases in the UK. It is paid by the buyer of the property and is usually calculated as a percentage of the purchase price. Recent changes mean the amount a homebuyer is likely to pay has changed.
Stamp duty tax bands from 23 Sept 2022
Up to £250,000 - 0%
£250,001 to £925,000 - 5%
£925,001 to £1.5 million - 10%
Over £1.5 million 12%
Up to £425,000 - 0%
£425,001 to £625,000 - 5%
Homes priced above £625,000 – Normal rates apply
The amount of stamp duty you have to pay will depend on a number of different factors, including the value of the property and your personal circumstances. There is an additional rate of 3% for second homes and buy-to-let properties.
Paying stamp duty can add quite a bit to the overall cost of buying a property in the UK. However, there are a few ways that you can reduce or avoid paying it altogether (particularly if you're a first-time buyer). It's definitely worth doing your research and speaking with an expert before purchasing a property so that you know exactly how much money you'll need to budget for stamps duty and other associated costs.
Tim Bannister from Rightmove believes stamp duty changes will stimulate demand in the market. Tim said; “If the stamp duty cuts lead to a big jump in prospective buyers competing for the constrained number of properties for sale, then it could lead to some unseasonal price rises over the next few months. But because the change is permanent, and because of gathering headwinds such as rising mortgage rates, we expect to see a more gradual increase in demand compared with the surge when the temporary stamp duty holiday was announced in 2020. With more buyer demand we would also expect that the current trend of more properties coming to market will continue, offering more choice for buyers.”
At Coakley & Theaker, we aim to support the local community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today by calling us on 01284 769691.