How to avoid stamp duty on a house purchase and do first-time buyers pay it?
FOR first time buyers being able to avoid paying stamp duty on a house can be a helping hand to get on the property ladder.
So who can avoid stamp duty and how do you get around paying the tax?
Even if your home is worth under £125,000 and you don't pay any stamp duty you still need to fill in a SDLT form.
Do first time buyers have to pay stamp duty?
Thankfully, first time buyers don't have to pay stamp duty on properties valued up to £300,000.
This was announced in the Budget in November last year and was designed to help people get on the property ladder.
But estate agents claim that it has not been enough to boost the housing market.
Here is our guide on how to calculate stamp duty and how stamp duty relief for first time buyers has affected housing market.
How does stamp work duty in Wales?
The Welsh government have their own system in place that functions just like stamp duty.
In Wales the equivalent of stamp duty is land transaction tax.
Land transaction tax has different rates to stamp duty, home buyers in Wales don't have to pay tax on the price of a property up to £180,000.
But, there is no help available with land transaction tax for first time buyers in Wales.
The average price for a first time buyer purchasing a house in Wales is £131,735, so most people buying a first home will not pay land transaction tax anyway.
Is there stamp duty in Scotland?
The Scottish equivalent of stamp duty is land and buildings transaction tax.
You only need to pay the tax if your house costs more than £145,000.
There is no extra help with land and buildings transaction tax for first time buyers but, the average price of a first house in Scotland is £120,824.
If you really want to lower your stamp duty, build don't buy.
This is a bit of an extreme option but it will save you a lot of money on stamp duty.
The same rates of stamp duty and their equivalents in Scotland and Wales apply if your are buying land rather than a house.
Buying a piece of land with planning consent to build a home is often a lot cheaper than buying a house.
You will also pay a reduced rate of stamp duty on the cost of the land.
Because of the difference in price between buying land and buying a house you will pay a lot less stamp duty on land than you would do on buying a house.
Obviously you need to be careful doing this as building a house from scratch can be and expensive and risky process.
But if your aim is to pay less stamp duty you could save a lot by building rather than buying.
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