When you purchase a property in the UK, in most cases you will have to pay Stamp Duty Land Tax (SDLT) as the buyer of the property. 

It does not matter whether you are a first time buyer or you are buying numerous properties in a single transaction, Stamp Duty will apply to all properties concerned and will be payable by the buyer within a set time period. 

It is important to be aware that you may be eligible for a Stamp Duty rebate if you overpaid or did not need to pay stamp duty when you purchased the property. 

Contact experts in the field if you believe this might have happened to you.

What Is Stamp Duty and How Does it Work? 

Stamp Duty Land Tax is a tax that you pay on houses or pieces of land in England and Northern Ireland. Meanwhile, Scotland and Wales also have similar stamp duty schemes yet their rates vary. 

The amount of Stamp Duty that you pay on a property will differ depending on a number of factors, including the value of the property, whether it is above the threshold for paying Stamp Duty and what the status of the buyer is.

Your buying status will include whether you are a landlord, first time buyer or purchasing a holiday home, all of which will influence and affect the amount of the Stamp Duty you ultimately pay. Meanwhile, the price of the property that you are buying is one of the most important determining factors with regards to how much Stamp Duty you will ultimately have to pay.

It is always the people purchasing the property that will be required to pay Stamp Duty. This tax does not however incur VAT. There is also something called Stamp Duty surcharge. A surcharge of around 3% will be added on top of your original Stamp Duty if you are purchasing a buy-to-let property as a private landlord or through a limited company. You will also be charged the Stamp Duty Surcharge if you are buying a second home for £40,000 or more. 

When Do I Have to Pay Stamp Duty?

You will have to pay Stamp Duty on nearly all occasions when you are purchasing a property in the UK, whether it is a house, a bungalow, an apartment or anything else that meets the criteria for Stamp Duty in the UK. 

However, there are some exceptions to this rule. For example, if you are purchasing your main and only home then you will not have to pay Stamp Duty Land Tax if the property is worth less than £250,000. Moreover, if you are buying property for an additional or second home and the value of the property is not over £40,000 then you will not have to pay Stamp Duty

However, in most other cases, you will have to pay Stamp Duty even if you are a first time buyer, even though the costs as a first time buyer are slightly less. There are some other cases when you may be exempt from paying Stamp Duty including if the property has defects and if you sell your main residence within 3 years of buying your second property. 

If you have paid Stamp Duty even if these rules apply to you then you might be eligible for a full Stamp Duty refund or at least a Stamp Duty Rebate from HMRC. 

How Much Does Stamp Duty Cost?

The price of Stamp Duty will change depending on how expensive your property is, if you are a first time buyer, buying a main home or buying a second home. The rates of stamp duty tax vary between 0-12%. You can use a Stamp Duty calculator online to work out exactly how much your Stamp Duty Land Tax will cost you.

How Quickly Do I Need to Pay Stamp Duty?

When stamp duty charges apply, you must pay the tax within 30 days to HMRC, from the date of completion of the purchase of the property in question. Upon ‘completion of the purchase of the property’ means when the contracts are exchanged, signed and dated and you have the keys for the property. 

Make sure you have the money available to pay for your Stamp Duty within 30 days of completion otherwise there can be consequences such as fines and late fees.

When Could I Be Eligible For a Stamp Duty Rebate?

You may be able to get a Stamp Duty Rebate when you have overpaid for your Stamp Duty and in cases where you should have paid less or not paid Stamp Duty at all. 

A Stamp Duty Rebate allows you to get back some if not all of the money that you spent on the tax in the first place.

There are a few reasons why you might be eligible for a stamp duty rebate, which may include:

  • Second Home Stamp Duty Refund – You will be eligible for a stamp duty refund on your second home surcharge if you sell your main residence within three years of paying the additional 3%.
  • Shared ownership stamp duty refund for first-time buyers – Shared ownership properties purchased by first-time buyers will be exempt from stamp duty, providing the home’s value does not exceed £425,000.
  • Property Defects – Lastly, if the property had defects when you bought the property you might be eligible for a Stamp Duty rebate. You can now qualify for a stamp duty rebate should there have been any defects such as; faulty boiler or electrics, damp, structural issues, subsidence, asbestos, drainage issues, and others.