I am interested in buying a property for £255,000 but am concerned about the stamp duty issue. Can I do anything to minimise stamp duty payable?
The price of £255,000.00 is just over the first stamp duty threshold where Stamp Duty Land Tax (SDLT) changes from 1% to 3%. In other words for the extra £5,000 it is costing you an extra 2% on the overall price.
One way around this is to agree a genuine apportionment of the purchase price as to, say £250,000 for the house and £5,000 for fixtures and fittings which are included in the sale. Please note, however, that this apportionment must be entirely genuine and realistic otherwise it amounts to a fraud of the Inland Revenue.
If you can justify the cost of fixtures and fittings to the tune of £5,000 – and there is no benefit to a seller in participating in any potential fraud – then you will pay £2,500 in Stamp Duty, rather than £7,650. That’s a saving of £5,150.