According to a recent survey, homeowners and homebuyers in the UK believe a stamp duty reform is needed. Rickman Properties Limited explain how this might affect the London property market.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SLDT) is a tax that has to be paid when buying a property or a piece of land in England or Northern Ireland. This means that if you buy London properties, you have to pay SLDT unless you meet the requirements for a first-time buyer.
This tax is for freehold and leasehold properties but in case you are a first-time buyer, you don’t have to pay SLDT when the property cost is up to £300,000. For the rest of the buyers, since October 1st, the tax must be paid in case a property costs more than £125,000.
This tax includes a surcharge for those who are buying a second home and non-residents. Some circumstances where this tax could not be payable are when the property is transferred in court due to separation or divorce and if the home is a gift (as long as there’s no outstanding mortgage on the property)
What do the majority of UK homeowners and buyers think about SLDT tax?
A most recent survey reveals that 58% of people surveyed want a reformation in SLDT as they consider it outdated. It further discloses that 67% think the government should contemplate a fairer system for this tax. 70% of the surveyed tilt toward foreign buyers to pay a higher SLDT surcharge and 66% think those who buy a second property should also pay a higher surcharge.
The research also showed that 62% believe inheritance tax should be eliminated since SDLT has already been paid by the previous owner. Concern for the environment was also demonstrated in the survey because 36% are in favour of implementing an SLDT surcharge for those properties that are not energy efficient.
Overall, the research reveals homeowners feel the necessity of an SDLT overhaul with fairer alternatives and more surcharges targeted for foreign buyers and landlords. However, it is also believed the Government will probably be mindful about receiving higher taxes from overseas buyers as they play a key role in the UK’s real estate.
London Stamp Duty Land Tax
As we have already mentioned, the Stamp Duty Land Tax (SLDT) is a mandatory tax paid by people who buy a residential property, and it ranges from 2% to 12% of the purchase price. You can find stamp duty calculators online where you can calculate the amount of money to pay for your London property. Though be sure to bear in mind the surcharge added for non-UK residents and second-time buyers. If you’re considering buying or selling your London property, bear in mind that additionally to SLDT, you have to pay other taxes like the council tax.
We must wait to see how the real estate market is readjusted in the post-covid period to see if any legal changes are implemented. After which, we could assess how this might affect buying or selling London properties. Read our latest property market update for up-to-date information.
Related article: London property market in 2022
Contact Rickman Properties Limited
Buying and/or selling a property is no easy feat and involves an array of legal procedures and regulations that sometimes are not easy to follow. So be sure to contact our property experts to receive assistance. If your property in the Royal Borough of Kensington & Chelsea isn’t sold as of yet, and you may be considering letting, then please call Rickman Properties for a free valuation and professional advice on how letting should be done.
At Rickman Properties, we are always glad to help and will always provide you with professional and well-informed advice regarding the current London property market.
