If you are going to be purchasing a home in England and Northern Ireland,you must know about stamp duty. You should understand what stamp duty is as well as the amount you will have to pay. There are however other things that you will need to be aware of regarding stamp duty as well.
What Is Stamp Duty?
Stamp Duty is a property tax which is charged on the purchase of residential property,land and second homes. The tax will only be levied to primary residential property and land which costs more than Ã‚Â£125,000 and on second homes which cost over Ã‚Â£40,000. It is important to note that this tax will apply to both free and leasehold properties whether you have a mortgage or buy outright.
Stamp duty is only applied for property purchased in England and Northern Ireland. If you are purchasing property on Scotland and Wales,you will need to look at the Land and Buildings Transaction Tax and the Land Transaction Tax respectively. These are the taxes that are comparable to Stamp Duty.
How Much Is Stamp Duty?
While it is important to understand about Stamp Duty,you also need to consider how much it will cost you. There are various different bands of Stamp Duty based on the value of the property that you are going to buy. Using these bands,you will be able to calculate the amount of tax that you will be charged.
The good news is that if the house costs less than Ã‚Â£125,000,you will not have to pay any Stamp Duty. However,if the property costs between Ã‚Â£125,001 and Ã‚Â£250,000,you will have to pay 2%. The next band is Ã‚Â£250,001 to Ã‚Â£925,000 and the Stamp Duty will be 5%. Property that costs over Ã‚Â£1.5 million will have a Stamp Duty of 12%.
Stamp Duty Relief For First Time Buyers
If you are a first time home buyer,you will qualify for first time buyer’s relief. To qualify as a first-time buyer,you will need to be purchasing your first home