High home prices in the U.K. make it almost impossible to avoid paying taxes, so knowing how to calculate stamp duty – a service firms such as Stamp Calculator can help you with – will be important for property buyers.
The Stamp Duty Land Tax generally applies to purchases worth more than £125,000. If you are buying a house for the first time, you are no longer required to pay stamp duty for the first £300,000 of a home’s value.
First-time homebuyers are exempted from paying stamp duties for a certain price threshold, following the government’s announcement in November 2017. If you are married, both parties should not own any residential property in the country or overseas to qualify for the tax-free incentive.
Otherwise, a £300,000 home purchase would require a stamp duty of £5,000. This comprises a zero tax fee for the first £125,000, a 2 percent fee on the next £125,000, and a 5 percent fee on the remaining £50,000. The place where you live also determines how much you need to pay in stamp duties.
Those who live in Wales pay a land transaction tax instead of stamp duty. Home prices up to £180,000 bear no tax for buyers. In Scotland, the land and buildings transaction tax applies to home purchases worth up to £145,000.
In some cases, the most viable way to avoid paying stamp duties involves building your own house, especially after prices for most properties rose in the last five years. However, this would require extra planning such as finding the right land and applying for a building permit.
In some cases, you may even spend more than simply paying stamp duty.
Whether you are a first-time homebuyer, it is important to know how to calculate stamp duty and avoid being surprised with high fees. Choose a specialised tool that can deliver stamp duty quotations in an instant.