What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is more commonly known as ‘Stamp Duty’. This is a payable tax which is levied on single property purchases. In the past a physical stamp was attached to or impressed on the document to demonstrate the stamp duty had been paid before the document was legally effective. Today, thankfully we no longer require the physical stamp, but unfortunately the Tax remains in place when purchasing property in the UK.
When does it have to be paid and how is that done?
Stamp Duty must be paid as your mortgage completes. Your solicitor will make this payment as part of the conveyancing process and add this cost to their invoice as part of the overall transaction. You must therefore, ensure you have funds available for the solicitor to make the payment.
Can I delay payment or add it to the mortgage?
Unfortunately not. Stamp Duty must be paid at the same time the mortgage completes and it cannot be paid by adding it to the mortgage
How much will I have to pay?
There are various factors that are taken into consideration when calculating Stamp Duty.
• The Property Value
• Whether you are a 1st time buyer
• Whether you already own a property
• Current rates set by the Government
• Are there any special offers from the Government (often used to stimulate the market)
• Does the property have a commercial element?
To make it easier for you to work out, here is a link to the Gov.uk Stamp Duty calculator.