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Understanding new stamp duty rates

Whether you are looking to buy a new residential property or commercial premises, one thing that you'll need to consider carefully is the taxes that will be levied against the property. Aside from the actual cost of property, the stamp duty will be the highest outlay of the purchase.

Stamp duty land tax - also known as SDLT - is a fixed tax that must be paid when the purchase of a property is completed.

Every year, as the government announces its yearly financial plans, one question on the minds of those thinking about buying property is: "What will happen to stamp duty in the Budget?"

As specialists dealing with stamp duty taxes, MyStampDuty.co.uk can help you answer this question. Our team of consultants are here to provide assistance in understanding current stamp duty rates and how recent legislation affects the amount you may have to pay.

Calculating residential stamp duty

The amount owed will depend on the value and the purpose of the property, as well as whether or not you are a first-time buyer.

For first-time buyers purchasing residential property between March 25th 2010 and March 24th 2012, there is no stamp duty to pay on properties worth up to £250,000.

In addition, there is no residential stamp duty on properties worth less than £125,000, while properties designated as being in a disadvantaged area are exempt from stamp duty if their value is less than £150,000.

If you are not a first-time buyer, residential properties worth between £125,001 and £250,000 carry a one per cent stamp duty rate.

Residential properties worth between £250,001 and £500,000 have a stamp duty rate of three per cent.

A four per cent stamp duty applies on residential properties worth between £500,001 and £1 million, while those worth more than £1 million are charged at five per cent.

For properties with high leasehold rents, SDLT is calculated by a combination of the purchase price and the net present value (NPV) of the rent. For NPVs over £125,000, the stamp duty rate is one per cent of the value that exceeds £125,000.

Stamp duty rates on non-residential and mixed-use properties

If a property is for non-residential or mixed use, there is a different set of SDLT rates and thresholds.

This includes commercial property, agricultural land and any other land that is not part of a dwelling. In addition, if six or more residences are purchased in one transaction, the purchase falls into this category.

For non-residential or mixed-use properties valued at up to £150,000 and with an annual leasehold rent under £1,000, there is no SDLT.

SDLT is charged at a rate of one per cent for properties worth up to £150,000 and with an annual rent of £1,000 or more, as well as properties worth between £150,001 and £250,000.

Properties worth £250,001 to £500,000 will have an SDLT rate of three percent. And those worth more than £500,001 will need to pay four per cent.

In addition, those buying properties with high leasehold rents - an NPV of more than £150,000 - will be required to pay one per cent of the value over £150,000.

Get help from the experts in stamp duty

With so much to think about when calculating the amount you'll need to pay in stamp duty, it's no wonder many people choose to find experts to provide stamp duty land tax info.

In addition, there may be ways to mitigate SDLT, so it can definitely be of benefit to contact a specialist at MyStampDuty.co.uk for assistance. Our team includes lawyers, chartered tax advisors and solicitors who can guide you through your tax liabilities and help you to save money where possible.

Get in touch with us today by filling out the contact form on our website. We'll provide a free review to help you understand your situation and establish the best ways to proceed.

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How will the Scotland Act affect stamp duty?

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Why was the stamp duty holiday not extended?

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How did the Budget impact on commercial stamp duty?

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A stamp duty mitigation company should be able to demonstrate a strong track record of success and devise schemes that will not impact on your ability to obtain a mortgage. In addition, the plans should be deemed non-aggressive by HMRC.

What impact will the 2012 Budget have on stamp duty?

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