If you’ve been following me for some time then you’ll know all about the saga that has been our house purchase. We completed on our house in Feb 2021 but had been working hard on getting it to go through since August 2020. In theory it was a very simple transaction, we were buying the house off of my parents and there were no chains in any direction.
Dean had previously owned a house before we go together so didn’t qualify as a first time buyer so when the stamp duty holiday came around we jumped at the chance to take advantage of it and save some money. We had already been looking at Mortgages with our mortgage advisor and had one agreed in principle so we had everything good to go. I won’t lie, it was a stressful few months but we did eventually get everything to go through in time and we didn’t have to pay any stamp duty which saved us £7.5k!
If you’re about to embark on a house buying journey you’ll want to keep reading on to find out more about what stamp duty is and how it might affect you.
What Is Stamp Duty?
Stamp Duty is a tax you might potentially have to pay when you buy a property over a certain price. It’s called ‘Stamp’ duty as it actually used to involve an actual physical stamp being fixed to paper work years ago to show that you had paid the correct taxes!
One of the first things your probably thinking is – how much is this going to cost me?! The rate of stamp duty you will pay depends on:
- If you are a first time buyer
- If you are buying a second home/investment property
- The value of the property
- Where you are buying the property
If you are a first-time buyer you won’t have to pay any stamp duty if the property you buy is under £300k, if it is over this amount you will get a discounted rate up to £500k. If you aren’t a first-time buyer and are buying a property to live in as your sole residence, you will pay Stamp Duty on any residential property costing more than £125,000. The rates go up more if you are buying additional properties that aren’t your main residence (so if you’re buying something rent out for example)
You pay the stamp duty within 14 days of the completion/date of sale, if you don’t pay it within this time frame you could face fines and interest on top. In most cases, your solicitor will sort all this out before time and ask you to pay the stamp duty before completion just so they know that they have the money to hand and that you can actually pay it. It is still your responsibility to check that the stamp duty has been paid, even if your solicitor has offered to take care of it as it’s still a tax that is brought against your name, you will be able to confirm it’s been paid if you enquire with HMRC.
I hope this quick guide talking about what stamp duty is has been helpful – Good luck with your house purchase!
This is a paid collaboration with HSBC
Lending is subject to status. Your home may be repossessed if you do not keep up repayments on your mortgage.