What Is Stamp Duty Tax and Why Do We Need to Pay It?

 Stamp Duty

Stamp Duty tax is the property transaction tax. The tax is due to be paid on any property which is purchased at more than £125,000. Historically it was introduced in 1694 to raise funds for war. Over the years, the tax has changed in volume. In 1997, the chancellor Gordon Brown, introduced band thresholds of which the tax would be charged. These bands have changed as a response to the rapid rise in house prices.

Stamp Duty tax is the property transaction tax. The tax is due to be paid on any property which is purchased at more than £125,000. Historically it was introduced in 1694 to raise funds for war. Over the years, the tax has changed in volume. In 1997, the chancellor Gordon Brown, introduced band thresholds of which the tax would be charged. These bands have changed as a response to the rapid rise in house prices.

While the government says 98% of home buyers now pay less stamp duty than in the past, soaring London house prices have seen receipts from the capital increase in comparison to the rest of the country. Homes and Property have said the new bands have been blamed for the slowdown of the property market in the multi-million-pound price bracket.

“Stamp duty is thought to have started in the Netherlands in 1624. It was then introduced to the United Kingdom in 1694 and is the oldest tax collected by the Inland Revenue.”

In 2015/16, 7% of all UK residential SDLT receipts came from Kensington and Chelsea, where the average payment was £135,000 and 30% of all revenues came from the 10 highest paying local authorities. Nine of them in London and the tenth in Surrey. An additional 3% charge for any property not used as a primary residence has been charged since April 2016 to help towards doubling the affordable housing budget.

Head of Conveyancing, Mrs Aminah Bokhari, says “stamp duty tax is always something that clients worry about. They usually are not sure when or how to pay it. You must pay within 30 days of the day on which you are entitled to take possession of your new house. You still must submit a return even if you are not due to pay any stamp duty on the purchase price of your property, unless the property costs less than £40,000. Your solicitor or conveyancer should ensure that you do not miss the deadline. At Stirling Ackroyd Legal all of our solicitors and conveyancers ensure that clients are kept up to date and have all relevant deadlines brought to their attention in advance. We ensure that clients are well equipped with the necessary information from all angles that contribute to the buying of a property. Whilst it may seem like a sea of figures and dates, it is our profession to simplify this process for you”.