Glossary - Stamp Duty

Stamp Duty is a Government tax paid on the purchase price of property.
Stamp duty or stamp duty land tax (SDLT) is a tax charged on the purchase of property. It is calculated as a percentage of the properties value, so the higher the property value, the higher the stamp duty charged.

UK Stamp Duty
In the recent years the threshold at which stamp duty applies has been doubled, this was done to help first time buyers get their foot on the property ladder and assist families on their climb up the property ladder.

The Property Value new rates are:

• Below £120,000 – stamp duty does not Enquire.
• £120,001 to £250,000 - stamp duty is charged at 1%
• £250,001 to £500,000 - stamp duty is charged at 3%
• Above £500,000 - stamp duty is charged at 4%

Experts believe the impact of doubling the stamp duty threshold on residential property will vary throughout the UK. The raising of the threshold will have little effect in the south due to less than 20% of property values in this region falling under the starting threshold of £120,001. However in the north of England 60% or more of all properties fall under the new threshold.

SDLT Tip
Stamp duty land tax (SDLT) will require buyers to complete a self assessment form. Although tax thresholds will remain the same, the forms will reveal those homebuyers paying over the odds for fixtures and fittings in return for the sale price being fixed below a particular threshold. Sellers are basically asking a lower price for the proerty itself in order to evade the stamp duty tax, but they are then over charging buyers for fixtures and fittings. The tax office will have the power to insist that buyers it suspects of tax evading, pay the full stamp duty amount.
There could also be fines and interest charges for the buyers and sellers involved in this sort of tax evading scheme.

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