When buying a house, there’s a whole range of costs that have been be budgeted for and paid, many of which first time buyers may not be aware of in advance. One of those is Stamp Duty Land Tax. Here’s our guide to what it is and how much it could cost you.
Stamp Duty is calculated as a percentage of the value of the property and is divided into bands based on how much the property is worth.
No Stamp duty is owed on properties costing up to £125,000. After that the rates are 2% on properties costing between £125,000 and £250,000; 5% on properties between £250,000 and £925,000; 10% on properties between £925,000 and £1,500,000 and 12% on properties worth more than £1.5 million.
So, for example, if you are buying a house for £140,000, you will have to pay £300 in Stamp Duty, 2% of the £15,000 over the £125,000 threshold.
If you are purchasing a leasehold property then Stamp Duty is owed on the purchase price of the lease in accordance with the bands listed above. If the total rent over the life of the leas exceeds the £125,000 threshold for Stamp Duty, you will also have to pay 1% on the portion of the value of the rent over £125,000.
You will have to pay Stamp Duty once you have completed the purchase of the property and your solicitor will ask you to complete a Stamp Duty Land Tax return. This return has to be completed even if you are eligible for an exemption and your solicitor will be able to help you complete the form and handle the payment and lodging of the documents.
If you have any questions about Stamp Duty that we haven’t explained here, or if you’re looking to buy your first home, get in touch with Aria Residential online at www.ariaresidential.co.uk
or visit us in one of our branches in Templepatrick or on the Lisburn Road in Belfast.