Stamp duty

Stamp Duty

Not every home purchased has Stamp Duty applied, but many do and if you haven't taken this into account on your moving cost calculations then you could find yourself really struggling to pay all the fees which go along with moving home.

Stamp Duty Land Tax

Stamp Duty Land Tax is a tax due on property or purchases of land which cost over £175,000.00. This was raised as of the 2nd September 2008 from £150,000.00, and is set to remain at this increased limit until 31st December, 2009.

Stamp Duty Rates on Land and Property Purchases

* Up to £175k = 0%
* Over £175k - £250k = 1%
* Over £250k - £500k = 3%
* Over 500k = £4%

How Do You Pay Stamp Duty?

Where stamp duty needs to be paid a SDLT1 needs to be completed and sent to HMRC when you purchase land or property.

Usually your solicitor would complete the form for you and send it off, however it is Your Responsibility not the solicitors to ensure that the content of the document is correct, and that it has been sent.
Once your SDLT1 form has been checked and your payment received you will be sent a SDLT5 from the HMRC which will be needed by the Land Registry when you apply for registration of title or documents.

If you decide to send your SDLT1 form, then you need to send it to:-

HMRC Stamp Taxes,
Comben Houses,
Farriers Way,
Netherton,
Merseyside,
L30 4RN

Other Stamp Duty Documents

* SDLT2, When there are 2 or more buyers or sellers
* SDLT3, Where there is more Land or Property, and more space is required than that allowed on a SDLT1
* SDLT4, For more complex Commercial Leases and Transfers

Stamp Duty Exemptions

For purchases which fall under the Stamp Duty threshold, you may think that you do not need to do anything at all, however a Stamp Duty Land Transaction Return or Self Certification is still required. This relates to Property or Land Purchases under the Minimum Stamp Duty Rate of £175k, though there are some instances where a Stamp Duty Land Transaction Return is not required and this is when:-

* The Property has been left to you in a will
* Where no money has changed hands
* Where a marriage or civil partnership is dissolved
* Freehold transactions under £40,000.00
* Leasehold transactions under £40,000.00 where the lease has at least 7 years, and the lease payments are less than £1000.00 per annum
* Leasehold transactions where the lease is less than 7 years and the purchase price is not over the Stamp Duty Land Tax threshold.

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Updated on 6th October, 2009

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