Stamp duty is a charge levied by the Land Registry office to cover the cost of transferring the record of ownership of registered land or handling a conveyance. It’s payable on all properties valued at more than £60,000. Stamp duty is payable on properties under £60,000 if they form part of a larger purchase of several properties or a series of purchases.
How much is it?
One per cent of the purchase price for homes over £60,000 but below £250,000. For homes between £250,000 and £500,000, the rate rises to three per cent. For homes over £500,000, stamp duty is five per cent of the purchase price. A certificate of value must be submitted along with the payment, or else the higher rate of four per cent will apply regardless of the purchase price.
Who pays it?
The purchaser. If you have engaged a solicitor to act for you in buying your home, your solicitor may submit the payment on your behalf and charge you for it.
Are there any exceptions?
Yes. Chancellor Gordon Brown recently announced that property located in one of 2,000 local wards deemed by the Treasury to be ‘deprived areas’ – and costing between £60,000 and £150,000 – will be exempt from stamp duty. This will save buyers one per cent of the purchase price. For a list of areas affected by this, visit www.inlandrevenue.gov.uk.
What else do I need to know?
For many home buyers, stamp duty is a cost they may not have budgeted or bargained for. If you are concerned about whether duty is payable on the property you’re purchasing, check with your solicitor or phone the Stamp Offices helpline on 0845 603 0135.