Save Money On Stamp Duty Tip 1
If you are buying a home and you have just hit one of stamp duty thresholds then this can be very costly. For example if you buy a house for £120,100 you will have to pay £1,201 stamp duty but if you buy a house for £120,000 you pay zero stamp duty. The more expensive the house the worse it gets.
If a house is brought for at least £120,000 but not more than £250,000 then you will pay 1% stamp duty. If house is brought for at least £250,000 but not more than £500,000 you will pay 3% - that a big jump up. For example if you buy a house for £250,000 stamp duty is £2,500, but if you buy a house for just £1 more at £250,001 then stamp duty will be £7,500 - ouch.
However there is a legal way to the reduce stamp duty and that is to agree costs of chattels with the seller to be included with the cost of the house, as these aren’t included in the stamp duty thresholds. For example if you buy a house for £252,000 and can agree with the seller that they will include £3,000 worth of chattels then this will means you will still pay £252,000 total but in the eyes of the tax man you house is only worth £249,000 which is enough to avoid paying the higher stamp duty threshold saving you over £5,000!
BUT you have to make sure that the agreed a list of contents is close to the value you are listing or at least the same ballpark as tax inspectors do check up in some cases. Only chattels (moveable items) can be included fixtures and fittings can’t. You will then need to get your solicitor to process this agreement.