Daily Archives: May 4, 2018

woman using calculator on top of documents

Considerations for Computing the Stamp Duty Land Tax

woman using calculator on top of documentsWhen buying a house or any property, there are closing costs associated with the transaction. Typically, contracting a conveyance solicitor would help in filing the papers, and making sure that all the procedures, processes and paperwork were adhered to. This includes payment of any stamp duties.
Before hiring a conveyance solicitor, due diligence has to be done, as well as an estimate of the duties to be paid. A stamp duty calculator for the UK is highly recommended to get an idea of the stamp duty due on the sale of a property.

What is the stamp duty?

Officially, it is called the Stamp Duty Land Tax (SDLT), and it is the amount of money that buyers pay upfront as taxes when they purchase real property. It is a requirement if you buy land or property worth above a certain price in the England, Wales and Northern Ireland. In Scotland, there is no longer any STLD. Instead, property buyers pay a Land and Buildings Transaction Tax.

Considerations

The SDLT is paid when the residential property is worth more than £125,000. For non-residential land, buildings and properties, the SDLT is paid when the transaction is for more than £150,000. The SDLT is paid when the buyer buys a freehold property, a new or existing leasehold, a property bought through a shared ownership scheme; or a transferred land or property in exchange for payment.

For first time buyers, there is a discount or relief if the price is less than £500,000. Another consideration is given if the property is non-residential or mixed-use.
The stamp duty is usually paid as soon as possible before the settlement of the sale. It should be settled within 30 days of completing the purchase of the property, home or land. If it cannot be paid within 30 days, the late payment will entail penalties and interest.