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How much stamp duty will I pay in Regent’s Park

Posted on Monday, December 16, 2019

The Regent’s Park area has some of London’s most elegant and attractive Georgian properties. But this desirable location, close to one of the capital’s best loved parks, comes with a price tag. The average cost of a flat in Regents Park is currently around £1.3m. If you’re paying more than £1million for a property, the associated bill for stamp duty land tax will be substantial too.  

So, anyone looking in the area should understand how the tax works and how much they are likely to pay. Read on for our complete guide to stamp duty, whether you’re moving house, buying a home for the first time or looking to purchase a second property. 


What is stamp duty?

Stamp duty land tax (to give it it’s full title – or SDLT) is a one-off tax that must be paid when you buy a property or land that costs more than a set threshold in England and Northern Ireland.  

The stamp duty threshold is currently £125,000 for residential properties and £150,000 for non-residential properties and land.  In Wales it is known as Land Transaction Tax (LTT) and in Scotland it’s Land and Buildings Transaction Tax (LBTT).

Different rules apply for first-time buyers purchasing a property costing £500,000 or less. There is also an additional stamp duty levy on for people buying a second property.  


How much will I pay?

Following a change in the rules five years ago, the rate at which you pay stamp duty depends upon the purchase price. It is a progressive tax, meaning you pay a higher percentage of stamp duty as the property price rises – but you only pay the higher rate for the portion of the price at that rate.  

In other words … 

Property value  

SDLT rates  

Up to £125,000  

0%  

The next £125,000 (the portion from £125,001 to £250,000)  

2%  

The next £675,000 (the portion from £250,001 to £925,000)  

5%  

The next £575,000 (the portion from £925,001 to £1.5 million)  

10%  

The remaining amount (the portion above £1.5 million)  

12% 

 

You can work out exactly how much you will need to pay by using a SDLT calculator – there is one on the government website.

 

First-time buyers’ relief

First-time buyers in England and Northern Ireland, purchasing a property worth up to £500,000, receive stamp duty relief. This means that they don’t pay stamp duty on the first £300,000 and pay 5% on the portion between £300,000 and £500,000. While it may be difficult to find a property at this level in Regent’s Park, it is worth knowing the rules about first-time buyers.

The rates for first-time buyers are

Property value  - SDLT rates

Up to £300,000 -  0%

The portion from £300,001 to £500,000 -  5%

 

In addition, the autumn 2018 budget extended the stamp duty tax exemption to first-time buyers purchasing a shared ownership property valued at up to £500,000.

 

What is a first-time buyer?

You will not be considered a first-time buyer if you have owned or inherited a property before or if you have been named on the deeds of another property. Nor will you be eligible if you are married and your spouse has owned a property in the past, even if you have never owned a property in your own right.

However, if you are not married but living with a partner who has owned a property and you have not, you will be considered a first-time buyer.

If you are purchasing a buy-to-let property, you won’t be considered a first-time buyer either, even if you haven’t owned property before - although you are allowed to rent out a room in your home.

 

Higher rates for additional properties

You will usually pay 3% on top of the normal stamp duty rates if buying a residential property means you will own more than one home.

You will not pay the extra 3% if the property you’re buying is replacing your main residence and that has already been sold.

If there’s a delay selling your main home, and it has not been sold on the day you complete on your new property, you will have to pay the higher rate. However, you may be able to get a refund if you sell your previous main home within 36 months.

Find out more about additional property rates on the government website.

 

Can I reduce the stamp duty I pay?

If the vendor is including Items such as wardrobes, carpets and white goods (these are called moveables) in the sale price you can arrange to buy these for a reasonable price and deduct the cost from the purchase price. Your conveyancing solicitor will advise you about this.

 

What if I’m an overseas buyer?

A new surcharge levied on non-UK resident homebuyers was announced in the October 2018 budget. The possible 1% additional levy has been consulted on but has not, as yet, been introduced.

 

How to pay stamp duty land tax

You have 14 days from completion date to file your stamp duty return and pay (previously the time limit was 30 days). If you don’t pay in time you could be fined.

In most cases, the solicitor carrying out your conveyancing will pay the tax on your behalf at completion and add the amount to their fees. They’ll also claim any relief you’re eligible for, such as if you’re a first-time buyer. However, it is your responsibility to ensure that the stamp duty is paid.

 

If you are looking at a property purchase near Regent’s Park, contact Kubie Gold. We can advise you about stamp duty as well as other aspects of your house purchase and show you our current selection of properties.