Have You Overpaid Stamp duty?
According to HMRC, 15,700 buyers overpaid stamp duty alone last year. Were you one of those?
If you own more than one property, a lot of people think they automatically will have to pay the extra 3%, however, this is not necessarily the case.
If you are purchasing a property that will be your ‘principle place of residence’, then you will not need to pay the surcharge, no matter how many other properties you own.
If you were purchasing a £500,000 property, the stamp duty on this would be £15,000, however, the extra 3% would double this to £30,000.
If you move before selling your previous home, then you have up to 3 years to claim the extra 3% stamp duty back.
Currently the normal stamp duty rates are
- Up to £125,000 = 0%
- £125,001 to £250,000 = 2%
- £250.001 to £925,000 = 5%
- £925,001 to £1.5m = 10%
- Over £1.5m = 12%
As you will see, adding an extra 3% will make a significant difference.
Good news for first times buyers though…
(A person is generally classified as a first-time-buyer if they’re purchasing their only or main residence and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.)
You will pay no Stamp Duty on properties worth up to £300,000. (a saving of up to £5,000). If the property is over £300,000 then the stamp duty above this will be apportioned. For example if the property is £450,000, the first £300,000 will be exempt and stamp duty will be applicable on £150,000
Have a good week.
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