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How to get a mortgage
Stamp duty relief
Stamp duty relief
Stamp Duty Land Tax (or just stamp duty) is famously expensive, as it can add thousands to the cost of your new home. It’s rarely added to the cost of a mortgage, and instead should be paid to the government (via your conveyancer) within two weeks of completion, or large penalties will apply.
The amount of stamp duty you’ll pay is based on the cost of the new property. This amount is a percentage of the property price, and the percentage itself goes up in bands.
The best – and easiest – way to calculate how much stamp duty you’ll pay is to use our Stamp Duty Calculator. The Welsh version of stamp duty is land transaction tax, which is collected by the Welsh Revenue Authority. In Scotland it’s land and buildings transaction tax.
Your conveyancer will be able to tell you what charges you can expect based on where you live in the UK, and what exemptions are available. Let’s take a look at the most common exemptions in England:
No stamp duty on the first £125,000
Stamp duty charges only apply after the first £125,000. You only pay stamp duty on the cost over this amount. That means that properties costing less than £125,000 come with no stamp duty at all!
First time buyers
If you’re a first time buyer the tax-free allowance rises to £300,000, giving you a real chance to find a property on which you won’t pay stamp duty at all.
The stamp duty holiday
Between 8th July and 31st March 2020, all buyers can benefit from the ‘stamp duty holiday’, which is designed to help keep the property market moving. In this time, nobody pays stamp duty on the first £500,000 of the cost of their new home. But remember, the purchase of your new home has to complete before the deadline.
You won’t be able to claim any stamp duty relief, or might even end up paying extra, if you’re doing something like buying a second/holiday home. Take a look at the rates here.
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