Stamp Duty Land Tax

Stamp Duty is payable on the purchase or transfer of land in the UK where the amount paid is above certain thresholds.  Even if no stamp duty is payable on a transaction often H M  Revenue and Customs still need to be notified.

Stamp Duty is calculated as a percentage of the amount paid for the property. From the 6th April 2011 the stamp duty thresholds and amounts are :-

Purchase price/lease premium or transfer value	SDLT rate	SDLT rate for first-time buyers
Up to £125,000	Zero	Zero
Over £125,000 to £250,000	1%	Zero
Over £250,000 to £500,000	3%	3%
Over £500,000 to £1 million	4%	4%
Over £1 million	5%	5%

For example :-

• If you purchase a property at a price of £120,000.00 no stamp duty will be payable but we will have to notify HMRC of the transaction. 
• If you purchase a property at £550,000.00 you will pay stamp duty at 4% which will be £22,000.00.

We will charge a small fee for completing and submitting the Land Transaction Return (the form which notifies HMRC of the transaction) on your behalf and will provide further information on these forms before exchange of contracts.

Stamp duty for First Time Buyers

The Chancellor announced in his budget on 24 March 2010 that legislation in the Finance Bill 2010 will, with immediate effect, introduce a relief from SDLT for all purchases of residential property up to a price of £250,000 where the purchaser or all of the purchasers are first time buyers and where they intend to occupy the property as their only or main home.  Currently this relief is time limited to two years.

In order to qualify for the relief you must satisfy the following conditions:-

• You must be purchasing a freehold or a leasehold interest in a residential property
• You must intend to occupy the property as your only or main residence
• The purchase price for the property must not exceed £250,000.00.
• A company purchaser will not qualify for the relief.
• The purchaser must not, either alone or with others, have previously owned property situated anywhere in the world

If you satisfy all these conditions we will ask you to sign a form before exchange of contracts confirming that you are entitled to the stamp duty relief.

Fixtures & Fittings and Stamp Duty

Sometimes a buyer may agree with a seller to pay a certain amount for the property and then to pay an additional sum for fixtures and fittings to be included in the sale and left at the property for the buyer on completion.  For example a buyer may agree to buy a house for £250,000.00 and pay an additional £5,000.00 for fixtures and fittings to be included in the sale and to be left at the property on completion.   This way stamp duty is paid at 1% (of £250,000) rather than at 3% (of £255,000).

The amount attributed to fixtures and fittings must be reasonable and must reflect the true value of the items to be left at the property.  If an unreasonable apportionment is made between fixtures and fittings and the actual price of the house, this may amount to a criminal offence.  If you do attribute a value to fixtures and fittings we will recommend that a detailed list is attached to the contract setting out the agreed value of each item to be left at the property.