What is a stamp duty ? Let’s say I have a stamp duty of £5k. What does it mean? I have to pay £5k every month for the house I bought?
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A “stamp duty” means that you owe a one-time fee/tax of 5k GBP before the transfer document showing that you bought the house can become legally effective. Whoever you worked through to buy your house ought to have explained that to you during the process; not sure offhand why they wouldn’t have.
It’s somewhat similar to your DVLA’s first registration fee, as well as various similar fees here in the US.
Stamp Duty (also known as Stamp Duty Land Tax or SDLT) in England & Wales is a tax based on the value of land and property that you purchase.
It doesn’t mean that you pay £5k a month. It just means a single charge of £5k is payable on that purchase, based as a percentage of the total sale price. The Stamp Duty should be handled for you if you’re using a Solicitor or Estate Agent.
Also, any further purchases of land and property that you make will take into account the value of all the land/property that you own when calculating the rate on all future purchases.
The rates are:
|PURCHASE PRICE|RATE ON MAIN RESIDENCE|RATE FOR ADDITIONAL PROPERTIES|
|:-|:-|:-|
|Up to £125,000 (£300,000 for first-time buyers)|0%|3%|
|£125,0001 – £250,000|2%|3%|
|£250,001 – £925,000|5%|5%|
|£925,001 – £1,500,000|10%|13%|
|£1,500,001 +|12%|15%|
Stamp duty is a one-off payment made when a major transaction occurs and is a percentage of the value of the transaction. The idea is that you are paying for an official to “stamp” the transaction and make it official. The classic example is the sale of a house: stamp duty is a percentage of the sale value, and is paid at the same time as the sale occurs.
You will most likely have some other tax to pay in an ongoing way related to the value of your house, but this will be much lower.
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