Stamp Duty: Do you know the tipping points?
Buying a house is considered to be one of the most stressful and expensive things we do. But the cost of buying a property has significantly risen as more and more buyers are pushed into the higher Stamp Duty price brackets.
To help as much as we can we’ve got our Head of Property and conveyancing expert, Lynne McCaffrey, to give a Stamp Duty masterclass so you fully understand its implications on your property purchase:
“There are a number of charges that come with buying property and often the most sizeable (obviously discarding the property price!) is Stamp Duty.
“If you buy a property over a certain price – currently £125,000 – you have to pay Stamp Duty and the amount you have to pay depends on the purchase price of your property.”
Stamp Duty Price Brackets
|Property Price||Stamp Duty||Example|
|Property Price||Stamp Duty|
|Below £125,000||No stamp duty||£124,950||£0|
|£125,001 - £250,000||1% of property price||£175,000||£1750|
|£250,001 - £500,000||3% of property price||£425,000||£12,750|
|£500,001 - £1million||4% of property price||£695,000||£27,800|
|£1,000,001 - £2million||5% of property price||£1.5million||£75,000|
|Over £2million||7% of property price||£3million||£210,000|
“As house prices have risen so has the total about of Stamp Duty paid; latest figures have shown that in the year to June, stamp duty revenue has totalled £10.2billion. To put that into context, the record high is currently £10.6billion but that is in the year to October 2007.
“This is largely due to the fact that a quarter of all property sales are for houses worth more than £250,000 compared to a tenth in 2013. If a property tips past the first threshold then difference in stamp duty liability is vast so it’s definitely worth to bear this in mind when making offers.”
“Stamp Duty is a compulsory charge for all property purchases – unfortunately there is no escaping it. Because of this we include it, and all other charges, in our quotes. Other solicitors tend not to, therefore making them appear significantly cheaper.
“The problem is this is the buyer will then end up with a very nasty surprise downstream and maybe even find themselves without the funds to pay it. Talk about tipping someone over the edge!”
Content correct at time of publication