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Unlock the door to your dream home

Buying or selling a property is a big step, but it doesn’t have to feel overwhelming.   One key piece of the puzzle to understand is stamp duty – a tax that can influence everything from budgeting to the timing of your purchase.   At David Allen Financial Services, we’re here to guide you every step of the way, making complex matters simple so you can focus on what matters most: finding your perfect home.

What exactly is Stamp Duty?

Stamp duty, officially known as Stamp Duty Land Tax (SDLT) in England and Northern Ireland, is a tax paid by the buyer when purchasing property.   While sellers aren’t directly responsible for this tax, understanding how it works and the potential for legislative changes is crucial.   Why? Because it can affect everything from market demand to how you plan your next move.

Whether you’re selling your first home, buying an investment property, or transferring ownership, being proactive about these details can save you time, money, and a lot of stress.

Selling your property? Here’s what you need to know

If you’re selling your main residence, the good news is you won’t need to pay stamp duty.   That responsibility lies with the buyer.   However, it’s important to ensure your legal documents accurately reflect the sale to avoid any hiccups.

Selling an investment property or second home? While you’re still exempt from stamp duty, you may need to consider Capital Gains Tax (CGT) on any profit made.   Similarly, inherited properties or those transferred as a gift may involve taxes like Inheritance Tax or CGT, but not stamp duty.

Every scenario is different, which is why having a trusted adviser to guide you can make all the difference.

Buyers, take note

For buyers, stamp duty is a significant consideration.   The amount payable depends on the value of the property, with higher-value homes attracting higher rates.   Fortunately, if you’re a first-time buyer, you could benefit from stamp duty relief, making your first step onto the property ladder a little easier.

Sellers should also keep this in mind, as buyer incentives like these can affect demand and property prices.

The Stamp Duty rates until 31 March 2025 (England and Northen Ireland)

* (1) Rate applies to the relevant portion of the purchase price. (2) This higher rate/surcharge does not apply if an additional property is bought for less than £40,000 (3) The £425,000 first time buyer stamp duty threshold does not apply if the property you are buying costs more than £625,000; if it does, the £250,000 threshold applies.

The Stamp Duty rates from 1 April 2025 (England and Northen Ireland) 

* (1) Rate applies to the relevant portion of the purchase price. (2) This higher rate/surcharge does not apply if an additional property is bought for less than £40,000 (3) The £300,000 first time buyer stamp duty threshold does not apply if the property you are buying costs more than £500,000; if it does, the £125,000 threshold applies.

Stay ahead of legislative changes

Government policies around stamp duty change frequently, with adjustments to rates, thresholds, and relief schemes.   Staying informed is key, especially when new budgets or announcements are on the horizon.   Changes could impact the timing of your transaction, the appeal of your property, and the market overall.

Current Land and Buildings Transaction Tax (LBTT) rates in Scotland

In Scotland, stamp duty takes the form of LBTT, which applies to residential and non-residential property purchases.  While the main rates and bands for LBTT have remained unchanged, recent developments announced in the Scottish Budget on Wednesday 4 December 2024, introduced an important adjustment.

The Additional Dwelling Supplement (ADS), charged on purchases of second or subsequent properties, has increased to 8%, effective immediately from midnight on 4 December 2024.  This supplement is applied on top of the standard LBTT rates and is something to consider carefully if you are planning to invest in property or purchase a holiday home in Scotland.

Understanding LBTT and the impact of the ADS is crucial for buyers navigating the Scottish property market.  Whether you are purchasing your dream home or considering an investment opportunity, being aware of these differences ensures you can budget effectively and make informed decisions.

The LBTT rates from 5 December 2024 (Scotland)

* (1)Percentage figures show LBTT and ADS rates combined. ADS is calculated in addition to LBTT and is applied at 8% to the total purchase price above £40k. *(2) An additional dwelling purchased for less than £40k will attract 0% tax. For purchases from £40k to £145,000 the rate will be 8% on the full purchase price.

Why choose David Allen Mortgage Advisers?

Navigating stamp duty, mortgages, and the overall buying process can feel like a maze—but it doesn’t have to.   Our team of expert mortgage advisers at David Allen Financial Services is here to make your journey as smooth as possible.

We’re not just about crunching numbers; we’re here to listen, guide, and tailor solutions that fit your unique circumstances.   From first-time buyers to seasoned investors, we’ll be by your side, ensuring every step is clear and every decision is informed.

Let us help you make sense of stamp duty and secure the mortgage that opens the door to your dream home, please give us a call on 01228 711888 or if you are calling in Scotland give us a call on 01387 270340 to speak to one of our expert advisers.

_{David Allen Financial Services (Dalston) Ltd (Registered in England & Wales, Company Number 06966976) has its registered office at Dalmar House, Barras Lane, Dalston, Carlisle CA5 7NY. The company is authorised and regulated by the Financial Conduct Authority. Firm Reference 506138.}