To put it in a short way, stamp duty is a tax on land and property transactions. For the most part, you will have to pay stamp duty when you buy a house or apartment. Stamp duty is officially known as stamp duty land tax (SDLT) but being how we are, it’s more commonly known as simply, stamp duty.
The amount stamp duty you will have to pay depends on the value of the property you have bought.
When do I have to pay stamp duty?
You will more often than not have to pay the stamp duty within 30 days of the ‘effective date’ for a property valued at over £125,000. The ‘effective date’ is typically the day the purchase of the property has been concluded.
The stamp duty must however be paid sooner under other circumstances. For instance, if you move in to the property earlier than the day of completion or you pay for the property prior to the day of completion, the 30 day payment terms starts from these earlier dates instead so bear this in mind when choosing your options.
For the majority of people, you will have instructed a conveyancing solicitor to deal with matters; this solicitor will also pay the stamp duty on your behalf. Even though your solicitor will do this, you still must check with the HMRC that you have paid the right amount.
Do I always have to pay stamp duty?
It would be a very rare occasion if you did not have to pay stamp duty on a property valued at over £125,000.
To put this into perspective, if for example, you done a house swap with a family member or friend with no cash involved just a straight swap; you would both have to pay the stamp duty at the value of the house you are moving into. The same thing applies whether you buy a house outright or through a mortgage, you will still have to pay stamp duty on the value of the property.
If however you are getting divorced or separating, this might be an occasion where stamp duty is not applicable. This only way this applies is if one partner is transferring their share of the house or apartment to the other. If you sell the property to a third party, the buyer will have to pay stamp duty in the customary way.
Need mortgage advice?
It is vital to obtain mortgage advice before jumping into the potentially biggest purchase you will ever make. There are various ways to obtain advice, but you can find mortgage advice from an independent mortgage adviser.
With all this in mind, if you are thinking of moving, or buying your first/next property, why not start the search here