It’s tremendously exciting when you’re ready to Buy a house but it’s also chaotic getting everything in order for your big purchase. In the midst of the excitement and chaos it’s easy to forget a big expense: the stamp duty land tax (SDLT).
The SDLT is a sell-assessed transfer tax on all land transactions and first time and even second or third time house buyers often overlook this tax. Research from TSB found that 25% of people who Find property forget to calculate the expense and 14% of second/third time buyers forget.
Interestingly enough, the numbers show that consideration for SDLT varies from one region. A significant 59% of buyers in East England, 48% in South East and 49% in the South West set aside a specific amount of money for the tax. On the other hand, only 26% of buyers in North West and 25% in Wales consider that they might have to spend an additional 5,000 when they make an offer.
The rates of the SDLT are:
- Up to £125,000 – 0%
- From £125,001 to £250,000 – 1%
- From £250,001 to £500,000 – 3%
- From £500,001 to £1,000,000 – 4%
- From £1,000,001 to £2,000,000 – 5%
The average STLD exceeds 5,000, more than 10% of the average deposit and for first time buyers the average cost is more than 15% of their deposit. The cost can be so expensive that 9% of buyers cap their bid to fall into a lower stamp duty bracket.
With more than 36% of first time buyers and 41% of second/third time buyers paying tax from their personal savings and with housing prices surging, it really is something that cannot be overlooked buy homebuyers.
If you have been hunting for Property to rent for a while you know that it can be exhausting, irritating and down right discouraging. You don’t have to find your dream home and then discover that it’s 15% more than you thought.