Who pays stamp duty? | The Sun09/21/2022
STAMP duty is a lump sum payment anyone buying a property or piece of land over a certain price needs to pay.
So what are the rules of stamp duty and how much might you pay? We explore below.
What is stamp duty?
Stamp duty is a payment you'll need to make if you're buying a property or piece of land.
You pay the tax when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house
The rate a buyer has to fork out depends on the price and type of property.
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You only pay when you hit a certain threshold- currently, this is £125,000 for residential properties.
The threshold for non-residential land and properties is £150,000.
If you buy a property for less than these thresholds, then you don’t have to pay the tax.
Back in 2020 the Treasury temporarily raised the stamp duty threshold from £125,000 to £500,000 for property sales in England and Northern Ireland in response to the coronavirus pandemic.
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But that stamp duty holiday came to an end in July 2021.
But last night, PM Liz Truss revealed she plans to axe stamp duty in her mini-budget on Friday.
She's been planning it with Chancellor Kwasi Kwarteng for the past month to help first-time buyers.
Cutting the levy will encourage growth by allowing more people to move property and getting more first-time buyers on the housing ladder.
Who pays for stamp duty right now?
Home buyers always pay for stamp duty, not the seller.
This is often done through a solicitor on your behalf as part of the buying process, according to HomeOwnersAlliance.
Home buyers have fourteen days from the date of purchasing a property to file a return to HMRC with any stamp duty due.
Not everyone pays the same amount.
If you are a first-time buyer you can get a discount if the following applies to you:
- You, and anyone else you’re buying with, are first-time buyers
- The purchase price is £500,000 or less
This rule came in on July 1, 2021. You’ll also be eligible for this discount if you bought your first home before July 8, 2020.
How much stamp duty will I pay?
How much you pay depends on whether the land or property is residential use or non-residential or mixed-use.
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There’s a long list of different types of non-residential or mixed-use properties, such as shops, offices and agricultural land, which you can check here. The government’s Stamp Duty Land Tax Calculator can be used to understand what you should pay.
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