Understanding stamp duty when buying or selling a property in Harrow
If you’re a first-time buyer, you’ll need to understand how stamp duty works. If you’re buying a property in Harrow, Brent, Ealing, Hillingdon (or anywhere else within the jurisdiction of England and Wales for that matter) you’ll be required to pay a lump sum on any house worth over £125,000.
The rate paid by the buyer is variable and is calculated from the purchase price of the property. Rates can also vary depending on the type of building (commercial property may incur larger stamp duty than residential property, for example.
Stamp duty must be paid within 30 days of the purchase of your home going through. If you don’t submit a stamp duty return within this period, HMRC could charge you interest and penalty fees. This is usually done by your solicitor or conveyancer.
How to pay your stamp duty
Your solicitor or conveyancer will typically deal with your stamp duty payment as part of their general overseeing of the purchase, although you can choose to do it yourself. Either way, it is your responsibility to ensure your return is submitted correctly and on time.
Stamp duty rates
At present, someone buying a property in Harrow can expect to pay
- 0% stamp duty on a home up to £125,000.
- Property which falls into the £125,001 - £250,000 bracket will incur a 2% charge.
- If the property is worth between, £250,001 - £925,000, the buyer can expect to pay 5% of the purchase price in stamp duty.
- Properties weighing in between £925,001 - £1,500,000 will incur a stamp duty charge of 10%. Any property worth over £1,5000,000 will incur a 12% charge.
- If you are a second time home buyer or a Buy To Let buyer, there is an additional 3% surcharge on top of the rates mentioned above.
- But if you are first time buyer There are different rules that apply.
- You get a discount (relief) that means you pay less or no tax if:
- you complete your purchase on or after 22 November 2017
- the purchase price is £500,000 or less
- you, and anyone else you’re buying with, are first-time buyers
To see current updates please visit https://www.gov.uk/stamp-duty-land-tax
To see the rates for past years, take a look at the HMRC website.
Stamp duty rates for first time buyers
If you’re a first time buyer (A first-time buyer is someone who's never owned a property, whether bought or inherited, anywhere in the world.) in England or Northern Ireland then you’ll pay no Stamp Duty on properties worth up to £300,000. For properties worth up to £500,000, you will not pay Stamp Duty on the first £300,000, instead you will pay Stamp Duty on the remaining amount up to £200,000. However, if the property is over £500,000 then you will pay the standard rates of Stamp Duty, meaning you do not qualify for first-time buyers relief.
Stamp duty when selling a property
If you’re selling a property in Harrow, the good news is that your sale won’t be subject to any stamp duty. Current legislation dictates that only the buyer is required to pay stamp duty. If the home has been used as your main residence it will also be exempt from capital gains tax liability.
Stamp duty on second homes
If you’re purchasing a property in Harrow with the intention of renting it out, it’s worth bearing in mind that different stamp duty rates apply, and you’ll incur higher charges in comparison to purchasing a home as your primary residence. At present, stamp duty on second homes is 3% higher than primary properties. However, if you sell your previous home or give it away within three years of purchasing a new property, you can apply to have the higher rate of the stamp duty you paid to be refunded to you.
If you are looking for a reputable estate agents in Harrow, contact Albert Grace today!
We recommend consulting your solicitor and/or conveyancer during the property transaction for the most accurate information. This guide is purely informational and should be treated as such, we, Albert Grace Property Management, do not provide liability for the protection of individuals, groups, organisations, businesses, spectators, or others who may participate in the the transaction. (Last updated Nov 2018)