I am hoping to part exchange my house for a new one. I have heard that this is a good way of saving stamp duty. Is this true?
Unfortunately it is not true. Some years ago Stamp Duty, as it was then, was only payable on the “Equality of Exchange”. This was the difference between the sale and the purchase prices and proved popular in the last recession when property developers were finding it difficult to sell new properties and the Stamp Duty savings were a popular attraction of part exchange schemes.
The new regulations governing Stamp Duty Land Tax (SDLT), as it is now, has removed this major benefit in the case of part exchange transactions. Stamp Duty Land Tax is payable on the value of the asset being acquired – regardless of whether it is being part exchanged for an existing asset.
Accordingly, SDLT will be payable on properties where the price exceeds £175,000.00 and not on the “Equality of Exchange” between the two part exchange values.
* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email firstname.lastname@example.org