When buying a property in the UK there are many different costs involved, one of which is Stamp Duty Land Tax. The rules around this tax have changed over the last few years and can often be difficult to understand. It is important to seek professional advice before any property purchases.
When purchasing any property in the UK costing over £125,000 you must pay a tax known as Stamp Duty Land Tax. Stamp Duty is paid to HMRC at varying rates depending on the price of the property that you are purchasing. However, there are some exemptions, for example, if you are a first-time buyer and you meet the criteria you do not have to pay the tax. There are also different boundaries for different house prices. A house in the £125,000 bracket is subject to SDLT at 2%. There are further thresholds at £250,000, £925,000 and £1.5 million. Any properties over this price are subject to tax at 5%, 10% and 12% respectively. This being said, SDLT can be a large expense when it comes to buying a property, so how can you avoid paying Stamp Duty Land Tax?
The only way to completely avoid paying SDLT is to either buy a property that is under £125,000 or qualify for the first time buyers relief. Houses that don’t meet the £125,000 threshold aren’t subject to stamp duty. Searching for a property with a price lower than this value will mean that you will not have to pay SDLT. View all SDLT exemptions here. As of November 2017, first time buyers are exempt from paying SDLT. Being a first time buyer by definition is someone buying a property for the first time, they may not have previously lived in or owned their own house. If you fall into this category you will be exempt from paying stamp duty. The threshold at which you will start paying the tax is set at £300,000 for first time buyers.
The rules around stamp duty tax have changed massively in the last few years. Overpaid stamp duty land tax is common for several reasons, in 2016 there were changes to the tax that many people may have been affected by but unaware of. There were also issues with the HMRC SDLT calculator meaning that many people could have overpaid tax without realising it. If exemptions you may have been entitled to were not applied at the time you may be eligible for a refund. View the criteria on our SDLT refund page and get in touch to claim your refund if you believe you may be eligible.
SDLT relief is essentially any program or incentive that reduces the amount of tax payable by an individual or business entity. As well as the first time buyers scheme, there are others such as SDLT multiple dwellings relief.
When you purchase more than one dwelling where a transaction or a number of linked transactions include freehold or leasehold interests in more than one dwelling, you can claim Multiple Dwellings Relief. Another example of a tax relief scheme is the SDLT relief for charities. If land or property is purchased for the use of charitable purposes. The HMRC will monitor the usage of the property and can withdraw the tax relief if the property stops being used as a charity or for charitable purposes within three years of purchase. View our page outlining all tax relief schemes available and find out if you are eligible. Claiming tax exemptions can be a long and time-consuming process. Due to various policy changes and constant rule amendments, it is highly recommended that you seek professional assistance.
Contact us today and begin your SDLT exemption claim.