Stamp Duty Increase

07 January 2010

If you purchase a property in the UK at a certain price, Stamp Duty Land Tax has to be paid to HM Revenue & Customs.

The Government had announced a Stamp Duty holiday from September 2008 on properties costing between £125,000 and £175,000, which was designed to help first time buyers and encourage the property market during the recession. Properties costing less than £125,000 were already exempt.

However, this temporary holiday has now come to an end and the threshold at which tax is payable has now been reduced once again to £125,000. As a result, tax is now levied at 1% of the whole purchase price of a property where this price exceeds £125,000.

There are higher tax rates for different priced properties, and any property in excess of £250,000 up to £500,000 would be taxed at 3% of the whole purchase price. Properties above £500,000 would be taxed at 4% of the whole purchase price.

It remains to be seen what impact this change will have upon the property market in the Highlands, and indeed throughout the country. However, with the average property price in the Highlands less than £175,000, it will undoubtedly mean an extra cost to be budgeted for to a considerable number of house purchasers.