It can be a challenging exercise to work out
exactly how much you can afford to repay on
your home loan after you've paid all your living
expenses. So to help you work out your Stamp
Duty Land Tax, we've created a special calculator
to help you.
If you live in a government-designated deprived
area or you are not sure, please follow this
link to the Inland
Revenue Stamp Taxes calculator.
If not, then simply enter the purchase price
of your house:
Details about the new tax
1st December 2003 saw the implementation of
the new Stamp Duty Land Tax which has major
implications on the house buying and selling
process. This replaces the Stamp Duty tax that
has been in existence for many years. The details
of the new tax are as follows:
- An SDLT Return must be completed and signed
personally by the buyer before exchange of contracts
(71 questions to be answered), this resembles
an Income Tax Return, clients will probably
need their solicitor's help to complete this
and there will be additional costs involved
in providing this assistance.
- Any Grant of a Lease, including the extension
of a lease where the average Ground Rent, (including
anything else described as "Rent") will exceed
£600, the flat owner will have to pay an additional
1% of the consideration irrespective of any
of the thresholds.
- Any Lease extensions will be subject to a
charge to SDLT on the usual Stamp Duty rates
to the landlord on the surrender value and to
the flat owner on the value of the property
after extension. This means that if the current
lease is worth £100,000 and the extended lease
is worth £120,000, the landlord and the owner
must pay £1000 and £1200 respectively SDLT.
If a lease is extended at the time of a purchase
and the buyer is paying the SDLT payable by
the landlord and on the extended value as well
as on the purchase price, this will represent
nearly a 3% charge on the value of the price
plus 1% of the consideration for the extension
if the Ground Rent in any one year exceeds £600.
- There will be a requirement on the legal
advisor to ensure that evidence is provided,
in the form of a written valuation from a surveyor
or valuer, as to the value of the property.
SDLT will be payable on the value irrespective
of the actual price paid - a good price achieved
by a buyer will mean that SDLT is payable on
the market price.
- Any significant apportionment of the price
for extras such as fixtures and fittings must
be evidenced by a written valuation by a qualified
valuer.
- SDLT is payable when the buyer moves in or
pays 90% of the purchase price irrespective
of the legal completion date.
- Except where developers are exempt, there
will be no relief from SDLT for part-exchanges.
- All existing clients will need to be advised
of the changes in the law and we will not be
able to guarantee the amount of SDLT payable
at the outset of the transaction.
