Stamp Duty Land Tax needs to be paid on all properties that cost more than £125,000. The amount of Stamp Duty that needs to be paid depends on how much the property costs; here is a breakdown of how Stamp Duty is calculated:
You will pay 0% for the first £125,000 of your property’s purchase price, you’ll then pay 2% on the portion of the price up to £250,000, 5% up to £925,000, 10% up to £1,500,000 and 12% on anything above that.
The Stamp Duty paid on second homes and Buy to Let properties is worked out differently, following changes to legislation that were announced in 2015. From April 2016, if you already own a home and are buying a holiday home, spare home or a property which you plan to let out; you will have to pay 3% more Stamp Duty when you buy your property.
Stamp Duty will be calculated in exactly the same way as for a primary residence, but an additional 3% of the purchase price will need to be paid. For example, a £300,000 property would cost £5,000 in Stamp Duty as a first property. However, as a second home or Buy to Let property, an extra 3% (£9,000) will need to be paid, making the total Stamp Duty £14,000.
If you have any questions about Stamp Duty, please contact one of our Financial Advisors by contacting your local Prospect branch!