Stamp duty, also known as land transfer tax, is a tax levied on the purchase of property in the United Kingdom. The tax is paid by the buyer and is typically paid at the point of sale. The amount of stamp duty payable depends on the purchase price of the property.
Stamp duty is a significant cost for homebuyers, and it’s essential to understand how it works and who pays it. In this article, we’ll break down the basics of stamp duty, including who pays it, how much it costs, and when it’s due.
Who pays stamp duty?
Stamp duty is typically paid by the buyer of the property. This includes individuals, companies, and other entities that purchase property in the UK.
How much does stamp duty cost?
The amount of stamp duty payable depends on the purchase price of the property. The UK government has introduced a new stamp duty system, which is based on the property’s value rather than its price. The rates are as follows:
0% on the first £125,000
2% on the next £125,000 (up to £250,000)
5% on the next £250,000 (up to £925,000)
10% on the next £575,000 (up to £1.5 million)
12% on the next £575,000 (above £1.5 million)
When is stamp duty due?
Stamp duty is typically due on the date of completion, which is the date the property is transferred to the buyer. However, the buyer may be able to delay payment of the stamp duty until the property is registered at the Land Registry.
What are the benefits of stamp duty?
While stamp duty can be a significant cost for homebuyers, it also helps to fund public services and infrastructure projects. The tax revenue generated from stamp duty is used to fund local authorities and other public bodies.
Conclusion
Stamp duty is an important consideration for anyone buying a property in the UK. Understanding who pays it, how much it costs, and when it’s due can help homebuyers make informed decisions about their purchase. By knowing what to expect, homebuyers can better plan their finances and avoid any unexpected costs.
