Buying a house down south? Be prepared to pay more Stamp Duty Tax!
The North/South divide in the UK appears to be more than purely geographical and has even been proven to affect how much Stamp Duty Land Tax (SDLT) you might have to pay when buying a property.
The latest research from HouseSimple has shown that if you’re buying a house in the South of England, you will more likely have to pay a higher amount of Stamp Duty than when buying a house up North. The difference can reach a staggering £10,000 when comparing the tax paid on houses in some of the most expensive towns in the South and some of the cheapest properties in certain Northern towns, although the average tax difference settles at a surprising £4,300.
While it is clear that the disparity in Land Tax having to be paid is predominantly due to the stark discrepancies in house prices in the North and South of the UK, it is often a cost that is not at the forefront of minds when buying a property; you don’t choose where or what property you are going to buy because of the Stamp Duty Tax attached to it, it is often a secondary consideration (if that). House prices in the South of the UK are generally higher and thus leaving a larger Stamp Duty Tax bill, with properties in London leaving some of the highest.
Although we may see some changes to Stamp Duty in the upcoming budget, at the moment it evidently remains a factor to consider when purchasing a property, especially when it comes to location. The fact that the SDLT bill of a family home can reach 20-25% of a buyer’s average annual salary means that it cannot be ignored as an expense (despite seeming minimal in the grand scheme of buying a home!)
Stamp Duty Land Tax becomes payable on residential properties costing over £125,000 and is then calculated based on a sliding scale rate ranging from 2% and 12%. It is always worth checking what your bill will be using the Stamp Duty Tax Calculator on the Gov.uk website, or ask your solicitor for an SDLT estimate; we include these within all of our initial quotes to clients so you are aware of all the costs involved in your purchase from the offset, and also prepare and submit the return for you when the time comes.