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FDR Law Legal Clinic - Do I need to pay Stamp Duty?

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Tim Jordan, Conveyancing solicitor, based at FDR Law’s office in Stockton Heath discusses Stamp Duty Tax

Q: I am about to buy a house and am unsure exactly what Stamp Duty Land Tax is?

A: Stamp Duty Land Tax (SDLT) is the tax anyone buying property or land over £125,000 must pay. This includes anyone who is buying a freehold property, new leasehold or anyone buying through a shared ownership scheme and is still colloquially known as Stamp Duty.

How much you pay will depend on whether the land is residential or non residential.  You must send an SDLT return to HMRC within 30 days of completing the purchase of your house. SDLT  is calculated at a percentage of your property’s value, for example if you purchase a house costing between £125,001 and £250,000 you would be charged 2% of the final value.  SDLT on a house valued at £275,000 would be £3,750.

Your solicitor will be able to advise you on the amount of SDLT you will be paying; you can also double check by using the HMRC SDLT calculator. A solicitor will prepare a financial statement and collect stamp duty to pay on your behalf before the completion of the sale. 

After completion your lawyer will fill out any necessary paperwork to be sent to HMRC, sometimes there is an additional charge for this, however having a solicitor fill the forms out on your behalf can save you time and eliminates the risk of mistakes being made.

If SDLT is not paid within 30 days there is a penalty fee, usually your conveyancing lawyer will keep you updated but it is a good idea to make sure the tax is paid as otherwise you will be responsible for the fee.

Often people overlook SDLT when moving house, however there is no way of avoiding paying the tax. It may be tempting to look for ways of minimising it, but your lawyer will be to advise you on safer sensible options rather than falsely advertised offers such as deals to reduce your stamp duty liability.

Sometimes a mortgage lender may offer to cover the costs of stamp duty tax or your building company may offer an allowance against the house sale price. It is advisable that you always consult your solicitor; they can advise you as to whether it is a financially sound offer.

The process can be confusing especially if dealing with many other forms in relation to the sale of a house; however an experienced conveyancing lawyer will be able to help make the process as stress free as possible.

For further queries contact our residential conveyancing partner Tim Jordan at tim.jordan@fdrlaw.co.uk or on 01925 604713

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