A Guide to Stamp Duty for First Time Buyers

13 January 2013

There are many costs to think about when it comes to buying a home for the first time. The most obvious one is, of course, the house itself, but there are also lots of other charges you might not have thought about before. One of these is stamp duty.IMG

What is stamp duty?

This is a tax that has historically been levied on all purchases of property and shares, although there are now separate charges for each of these: stamp duty land tax for property and stamp duty reserve tax (or just stamp duty for paper transactions) for shares.

It's stamp duty land tax you should be most concerned with when looking into what's involved in the house buying process. This is charged as a percentage of the total value of the house or flat you end up purchasing. This percentage varies depending on how much the property costs - the higher the value, the higher the proportion of this you will have to pay.

How much is it?

While stamp duty levels are subject to change, currently there is no charge on properties worth up to £125,000. So, if you're looking to avoid paying stamp duty, it could be worth considering properties within this price range.

If, however, you have a bigger budget, stamp duty charges can range from one per cent of the property's value if you're spending between £125,001 and £250,000, to seven per cent for transactions worth more than £2 million.

One per cent might not seem like much, but bear in mind that this means a property at the very lowest end of the one per cent bracket will still incur a stamp duty charge of £1,250 - which can suddenly look like a lot of money when you add it to the other expenses associated with buying a home, such as legal fees, mortgage arrangement costs and surveys.

For further information contact our in-house financial advisor who will be able to advise your further on all aspects of stamp duty, mortgages and insurnaces 01443 808 808

 

 

 

By Paul Davies
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