Homebuyers are in danger of being slapped with a tax charge, which could be as much as 12 per cent, when purchasing their first property, experts are warning.
As first-time buyers will not be familiar with the extra costs that come from owning a home, stamp duty may potentially be an expense that is not taken into account, which could “derail” budgets.
Homes that cost up to £425,000 are exempt from stamp duty for first-time buyers, however rates are applied on property costs above this level
- Five percent stamp duty levied on any property valued between £425,001 and £625,000
- 10 percent stamp duty levied on any property valued between £625,001 and £1,500,000
- 12 percent stamp duty levied on any property valued over £1.5million.
Stamp duty is a tax many have to pay when buying property
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Speaking exclusively to GB News, money experts from OnlineMoneyAdvisor.co.uk outlined why homebuyers must “be aware” of the potential levy they could be hit with.
They explained: “Stamp duty is a tax imposed on property transactions and, for first-time buyers, understanding its implications is paramount.
“While there might be exemptions or discounts for first-time buyers in certain regions, it's essential to be aware of this potential expense.
“Researching the stamp duty rates applicable to your specific circumstances is key.
“Understanding the thresholds and any potential relief available can help you plan for this significant cost and prevent it from derailing your budget.”
Usually, stamp duty is applied to property purchases which are over £250,000 but this threshold is raised for first-time buyers.
How much someone pays depends on when the home was purchased, how much was paid for it and whether buyers are entitled to relief.
Those concerned about the potential cost of tax when buying their first time can use the stamp duty calculator on the gov.uk website.
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Homeowners can increase the value of their property PA/GETTYHere is a breakdown of the tax rates for stamp duty for those who are not first-time homebuyers:
- Five percent stamp duty levied on any property valued at £250,001 or more
- 10 percent stamp duty levied on any property valued at £925,001 or more
- 12 percent stamp duty levied on any property valued at over £1.5million.