House Sale Stamp Duty: Understanding Your Costs
Jun 07, 2024
“Understand the house buying and selling costs by knowing the Stamp Duty charges”
Buying or selling a house involves several expenses, including documentation charges, legal fees, taxes, and commissions. Stamp Duty is one of the costs associated with house sales. Generally, buyers are liable to pay the stamp duty fees, whereas sellers are usually exempted from this type of cost. Revenue rules govern the Stamp Duty, or Stamp Duty land tax (SDTL), and depend on various factors. Stamp Duty charges depend on the type of property, where it is located, and the type of homebuyer. These are some exemptions in Stamp Duty for first-time homebuyers and others. Go through this blog post, to learn more about the Stamp Duty.
House Sale Stamp Duty: An Overview
Stamp Duty is a kind of tax a buyer must pay to complete the legal formalities. The Stamp Duty tax is calculated based on the price paid for the property. The tax is impacted by various factors such as property type, location, and buyer status.
How Much to Pay?
Homebuyers from the UK or elsewhere in Europe, have to pay a Stamp Duty on properties costing more than £250,000. However, if you are a first-time buyer, you don’t need to pay the Stamp Duty on properties costing up to £425,000. This tax applies to freehold and leasehold properties, regardless of whether you buy a house with a mortgage or outrightly. A breakdown of the Stamp Duty rates is given below in the table.| Minimum Sold Price | Maximum Sold Price | Stamp Duty rate |
|---|---|---|
| £0 | £250,000 | 0% |
| £250,000 | £925,000 | 5% |
| £925,000 | £1,500,000 | 10% |
| Over £1.5 million | – | 12% |
Note: The Stamp Duty rates mentioned in the table are applicable from 23rd September 2022 and will remain the same until 31st March 2025. However, changes in rates are subject to updates in government policies.
Stamp Duty Fees When Selling a House
The first thing to remember is that sellers don’t need to pay the Stamp Duty fees, it’s the buyers who are liable to pay it. Sellers are required to pay some other types of taxes when selling their homes. Capital gains tax is one of the major costs for sellers to pay for selling a house. Real estate agent commission, legal fees, and marketing expenses are the other costs to consider for a seller.
Stamp Duty Fee for Selling a Non-Residential Property
Stamp Duty fees apply to non-residential properties and a buyer must pay it. There is a difference in calculating the Stamp Duty fees for commercial properties compared to residential houses. The threshold starts much lower for non-residential properties. Non-residential property buyers must pay Stamp Duty fees on properties purchased for £150,000 or more.
Exemptions in Stamp Duty Fees
Before paying the Stamp Duty, check whether you are eligible for any exemption, as there are certain exemptions and reliefs in Stamp Duty fees. Some of the exemptions in the Stamp Duty are:
- You don’t have to pay the Stamp Duty fees if acquiring a residential property through a “Will”. Inheritance tax may apply to buyers acquiring residential houses through the terms of a will.
- Stamp Duty exemption is also not applicable to properties received through court orders during separation, divorce, or dissolution.
- Buyers don’t need to pay to purchase a freehold property for less than £40,000.
- You are also exempted from paying the Stamp Duty fee if a company or employer buys you a home for relocating.
In conclusion, sellers are exempted from paying the Stamp Duty fees, and buyers are the ones to pay it. Stamp Duty fees are determined by the property types, sold prices, location, and buyer status. If you are a seller aiming to sell a house, don’t consider stamp duty as a cost for selling your house. List your house on Estate Agent Power’s platform to present it for sale. The real estate platform helps you sell a property easily by presenting it to a global audience.
