Do you pay stamp duty when you sell a house?
If you consider yourself to be a novice in the property selling industry, terms such as ‘Stamp duty’ may feel like quite foreign concepts. Or even if you have already begun your journey in the industry, however, you may be feeling slightly overwhelmed with the vast amount of jargon surrounding it; seeking clarification on such terms and process are always advisable. In doing so, you end up with a sense of security and certainty in that you are indeed following the correct procedure which will certainly encourage the sale process to go rather more smoothly.
Keep on reading to find out more information on what exactly ‘Stamp duty’ is and whether it implies to your sale of a house.
What is ‘Stamp duty’?
As with most sales and purchases of items in England, you’ll find that some form of tax is usually involved in the transaction process. In this case, one of the tax payments applicable to the process of buying and selling of houses is called ‘Stamp duty’. However, this form of tax is only relevant to buyers rather than sellers. A buyer of a house in England may pay Stamp duty with the dependency being on when they bought the property and also, how much they purchased it for.
So, do I have to pay any tax at all?
As mentioned before, being a vendor of a house means that paying Stamp duty does not concern you, as the responsibility instead lands on the buyer. However, there is a certain type of tax that you may need to be aware about as a seller.
‘Capital Gains tax’ is a form of tax which you are required to pay if you sell a property and make a profit from it. Although, it only applies If the property is not your home. For example, you may pay Capital gains tax on the profit you make on selling a business premises or an inherited house. You are only taxed on the profit you make and the profit alone, rather than the entire sum of money you receive. For example, If the value of a house at the time of purchase was £200,000 and you sell the property at a later date for £250,000; the taxable amount would be on the £50,000 gain only.
I’m selling a house and buying a new one. Must I pay Stamp duty?
If you find your self in the position of moving home and are selling your property as well as purchasing a new one, paying Stamp duty may be applicable to you. Prior to 30th September 2021, a person would only pay Stamp duty if the price of the property equated to more than £250,000. If the new house you are buying is after 1st October 2021 and equates to more than £125,000, you would now also need to pay Stamp duty.
For those of you who are first time home buyers buying after 1st July 2021; Stamp duty would only apply to you if the price of the property amounts to greater than £300,000.
For more information on ‘Capital gains tax’ and the fee’s involved in buying and selling property, check out our other FAQ’s on https://fastcash4houses.co.uk/. Or, if you’d prefer, get in contact with us to speak to a member of our team directly on 01204 294356 or [email protected]. We’re dedicated to helping you every step of the way so don’t hesitate to reach out.
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