It’s estimated that homebuyers might be owed as much as £2 billion in tax
If you want to know how much stamp duty you’ll have to pay on a property or piece of land in the UK, or if you want to calculate if you’re eligible for a refund – you’ll need to use a stamp duty calculator for an accurate calculation.
What is stamp duty?
Stamp duty was first introduced to raise funds for the war in 1694. Obviously, the rates and what the funds are used for have changed a lot over the years.
In fact, the government tells us that 98% of people are now paying less in stamp duty than in the past.
Still, the latest bands are often blamed for slowing down the housing market. In some of the more expensive areas of London, the average stamp duty payment is £135,000, adding a considerable levy to the price of buying a home.
Who has to pay stamp duty?
In the UK, you are subject to paying Stamp Duty Land Tax (SDLT) when you buy land or property over a certain price.
At the time of publishing this, the SDLT threshold for residential properties is £125,000 and £150,000 for non-residential land and properties.
There are some different rules and exceptions to be aware of, however. You will pay less, or even no tax if you meet any of the following requirements:
There are also some special circumstances that may be applicable to you. A solicitor is best placed to advise you based on your individual circumstances.
Stamp duty rates for 2020
If you’ve bought a home before (meaning you’re not a first-time buyer) the rates for stamp duty for 2020 are:
0% Up to £125,000
2% Over £125,000 to £250,000
5% Over £250,000 to £925,000
10% Over £925,000 to £1,500,000
12% Over £1,500,000
It’s not always as simple as taking the purchase price of the property and working out how much stamp duty you have to pay based on the brackets above.
There are some other stipulations that might affect the calculation. Such as the “consideration” amount of your property. Which can be affected by good, release from debt, and some other factors.
Are you eligible for a stamp duty refund?
It’s estimated that homebuyers might be owed as much as £2 billion in tax.
The main reason for this is because the UK government’s own online stamp duty calculator has been discovered to be giving people incorrect information in the past.
There have been various errors, such as not accounting for annexes and other bits of property that could have given the buyer a saving, as well as not distinguishing between homes and mixed-use properties.
Solicitors have been relying on the government’s tools and have been using them to generate their stamp duty calculations for years.
Yet, the government has issued a statement saying their calculator is to be used as a “mere guide”.
So, if you’ve bought a property or some land and paid stamp duty in the last four years it might be worth your while to double-check how much stamp duty you should have paid.
Errors happen, especially with an area of tax that changes over the years and is subject to so many individual stipulations.
For the few minutes it will take, we recommend giving us a call to find out how we can help you check if you’re eligible for a refund, Or, to calculate how much stamp duty you’ll have to factor into a property or land purchase.
If you’re receiving letters from HMRC – from basic return checks to allegations of being involved in tax avoidance, or worse – you need the best tax specialists fighting your corner.