Why Do You Have To Pay Stamp Duty?

stamp duty

Stamp Duty Land Tax (Land and Buildings Transaction Tax in Scotland) is a lump-sum tax that must be paid by anyone purchasing a property or land costing over £125,000. Stamp duty applies to both leasehold and freehold properties, whether you are purchasing with a mortgage or buying outright.

Why does stamp duty exist?

When you purchase a property, any change in the ownership of the land must legally be registered with the Land Registry. In order to do so, a certificate is required from HMRC. They will only issue this upon receipt of payment of stamp duty due when the property is purchased. Luckily, this is something your solicitor will handle for you, so you don’t have to worry.

Where did stamp duty come from?

Stamp duty actually dates back farther than you might expect – it is actually an ancient tax which was introduced to the UK in 1694 during William and Mary’s reign. The tax was introduced to raise funds for the war on France. It was once a duty or tax on documents that needed a royal seal in order to be legally binding – documents such as the transfer of land ownership from one party to another.

How much is stamp duty?

The rate of stamp duty you will have to pay depends on the value of the property or land you are buying. Stamp duty rates are as follows:

Residential properties;

0% for transactions up to £125,000
2% for transactions from £125,001 to £250,000
5% for transactions from £250,001 to £925,000
10% for transactions from £925,001 to £1.5 million
12% for transactions over £1.5 million

Rates will increase by 3% from 1st April 2016 for purchases of additional properties, such as second homes or buy-to-let properties. The good news is that where stamp duty was once a flat rate, it’s now worked out on a sliding scale. This means that 98% of those who pay stamp duty will pay less than before under the new rules.

Do I have to pay?

Wherever you buy in the UK, whether you’re purchasing a three-bedroom family home in Sutton in Ashfield or investing in a detached house in Mansfield, you’ll need to pay stamp duty if your property costs over £125,000. You’ll need to pay your stamp duty within 30 days of the date of completion/date of entry (the date contracts are signed and keys handed over). Failing to pay on time could mean you face added interest or even a fine. It’s legally your responsibility to ensure your stamp duty is paid, and you can do so online or by phone banking, by post or at your bank or post office.

What happens if I fail to pay stamp duty?

Failure to pay your stamp duty means that the Land Registry will be unable to process a change in ownership of the land on which your property resides; effectively, it means your purchase will be unable to be completed. It’s highly unlikely that this will happen though, as most solicitors insist on payment of stamp duty before the completion date, to avoid any hiccups in the purchasing process.

How to Prepare Your House for Sale

How to Prepare Your House for Sale

So, you’ve decided to sell your home. What are the next steps you should take? Getting your house ready to make the best impression on the property market can seem like a bewildering task. What changes should you make to impress viewers and to portray your property in the most favourable light? Here are our tips for simple and practical actions you can take when preparing your property for sale.

1) Clear out the clutter

When looking around your house, a potential buyer will be trying to envisage transforming it into their own home. In their mind they will be visualising the wallpaper they will choose, where they will put the TV, how their furniture will fit. Make it easy for them by stowing away any clutter that has accumulated in the nooks and corners of your home. You will be surprised at how much additional living space this gives your home after you’ve had a good tidy up.

2) Refresh the decoration

If your paint or plasterwork is looking a bit flaky or tired, now is the time to apply a new coat of paint. It can really freshen up the overall feel of your property and help make a good impression on visitors. Also consider covering over any brightly coloured walls in a more neutral shade, and stripping any old wallpaper or woodchip. You don’t need to de-personalise the house completely, but tone down anything too bold, eccentric or personal.

3) Consider a new kitchen

The condition of the kitchen is often a deciding factor for property buyers. Consider updating your kitchen in order to help your home sell faster and add value to the property. New counter tops are the item most likely to add real value to a kitchen, although these can be expensive to install. Replacement cabinet doors are a cheaper alternative, and also make a good visual impression. There are things you can do to improve the look of your kitchen without spending a penny, of course. Having a wine rack or fruit bowl on a counter top is fine, but clear away any other clutter. Store away bulky appliances such as food processors and bread machines, and make sure all surfaces are scrupulously clean.

4) Keep it clean

Cleanliness, or the lack of, makes a huge impact on whether a visitor is impressed by your property. Take some time to target the vulnerable areas where dirt accumulates. Consider re-grouting any tilework in the kitchen or bathroom, clean any mould off the corners of windows and shower curtains, remove limescale from your taps. Don’t underestimate the little details people will notice. Just because you don’t notice the hopelessly stained bathtub anymore, doesn’t mean that other people won’t. Before viewers arrive, polish your metallic surfaces and wooden floors, dust your shelves and clean your carpets. Hang new towels in the bathroom. The smell of a clean home is appealing to visitors as much as the visual impression it makes.

5) Optimise your space

Carefully placed mirrors and accessories can help optimise your space by enhancing the amount of light and air in your property. Consider rearranging the layout of your furniture so there is more open space and free flow between the living areas. Open plan rooms make your home appear larger and more accessible.

Preparing your house for sale is about putting yourself in the shoes of your potential buyers. Think back to properties that you have visited and make a mental note of aspects that have impressed you, and things that have put you off. It is often the personal touches that sway buyer decisions, as it gives the overall impression that the property has been well loved and taken care of by its owners and will be in good condition.

Creating A Checklist For Moving House

moving home checklist

They say moving house can be one of the most stressful things you can do – but you can make the run up to moving day, and the day itself, go more smoothly by being organised. Creating a checklist for moving house ensures you won’t forget to do any of those important tasks whilst helping to reduce stress. Because there are many things you need to consider before the big day, we’ve got a few things you may wish to add to your moving house checklist.

Instruct an RICS Registered Valuer to carry out a survey on the property that you intend to buy as soon as you agree a price. Don’t leave it until the last minute. Discovering problems just before you had hoped to exchange contracts is really stressful and can result in you making rash decisions on your new ideal home.

Two months before the move

  • Order cardboard boxes
  • Organise self-storage, if needed
  • Have a clear out – think about what you will want to keep and what you no longer want, this is a good time to sell unwanted items or donate them to charity
  • Pack non-essentials; it’s never too early to start packing!
  • Book time off work for your move

5-6 weeks before the move

  • Get quotes from several removal companies and book one – it’s a good idea to ask friends for recommendations or find a reputable company on the British Association of Removers website
  • Check your home insurance policy will cover your contents during the move
  • Review your contents and buildings cover to ensure it’s suitable for your new home

3-4 weeks before the move

  • Now is a good time to search online for the best TV, phone and broadband deals for your new home, do you want to stay with your current providers or move to a new one (Tip: they will often do special deals to keep your custom, so it’s worth asking).
  • Redirect your mail (we recommend 12 months of redirecting as it can be hard to remember ALL of the companies that have your old address, you can then update the “less urgent” changes throughout the year).
  • Check out new energy tariffs

1-2 weeks before the move

  • Finish packing and start cleaning your home from top to bottom
  • Register to pay council tax at your new address
  • Cancel any local services or deliveries (such as newspaper deliveries)
  • Sort out your bills – update your address with your bank, credit cards, insurance providers, TV licence etc.

The day before the move

  • Pack an ’emergency’ box filled with essentials you’ll need straight away, such as kids/baby supplies, kettle and toaster, mugs, toiletries, device chargers etc.
  • Do a final clean of your home
  • Walk through your house and check everything is accounted for
  • Make sure you’ve got keys to your new property or have arranged to collect them
  • Prepare any moving-day essentials for your pets

The day of the move

  • Take final meter readings and keep these in a safe place
  • Switch off electricity and gas supply and check your property is secure before leaving
  • On arrival at your new home, check your furniture for any damage when the removal company unloads
  • Get your pets settled in – it’s a good idea to keep them in one room away from noise and stress until they are settled

Things to do after the move

Congratulations; you’ve survived moving day! There are still some things you’ll need to do though; once you’ve tackled the unpacking. Updating the electoral register is a must as you won’t automatically be registered to vote – you can do this online. Switch utilities providers once you have found the best tariff for your family’s needs and ensure you register with a local doctor and dentist. If you have pets, registering with the local vet is also a good idea.


A Landlord’s Guide to Selling a Tenanted Property

A Landlord's Guide to Selling a Tenanted Property

As a landlord, there may come a time when you need to sell your buy-to-let property, for whatever reason. Perhaps you can no longer meet the mortgage payments, maybe you are moving abroad and no longer want to be a landlord in the UK, or perhaps the time is simply right to sell in a buoyant market –possibly to realise a capital gain. Whatever your reasons for deciding to sell a tenanted property, there are some things you will need to consider, to make sure you don’t fall foul of the law (and to keep your tenants happy).

Communication is key

Whether your tenants have been living in your property for 6 months or 6 years, it is a good idea to discuss your intentions to sell the property with them as soon as possible. This means that they will be aware of what is happening and gives them the option to hunt for new accommodation, if necessary. Failing to discuss plans to sell with your tenant could leave them in for a nasty surprise!

Evicting tenants

Landlords should bear in mind that they do not have the right to evict tenants just because they want to sell their property. You could use a Section 21 notice to evict tenants, but this process can take several months, or you could sell your property with tenants in situ, although you may find this decreases the value of your property somewhat. On the other hand, if demand for the property in question comes mainly from investors, selling subject to an existing tenancy could maximise value. A professional Estate Agent will advise you on the best route to market. This will include advice as to the most appropriate method of sale – either Private Treaty or Public Auction.

Conducting viewings

Landlords do not have the right to conduct viewings with prospective purchasers whenever they like. The current tenants must be given at least 24 hours’ notice in writing of any proposed viewings, and landlords should ensure that the tenancy agreement allows viewings to be conducted. If there is no mention of this in the tenancy agreement, it is entirely up to the goodwill of the tenant whether or not they decide to allow viewings (which is why it pays to maintain a good relationship with your tenants). Even if the tenancy agreement does mention viewings, tenants have a right to refuse access for viewings taking place at times inconvenient to them. Arranging too many viewings could disrupt your tenants’ rights to ‘quiet enjoyment’ of the property.

What happens when the property is sold?

Tenants may have questions for you, as a landlord, as to what happens after the sale of the property. When your property is sold with tenants in situ, the purchaser becomes the new landlord of the tenants. Tenancy agreements are still valid even though the landlord’s name has changed. Whilst it is a good idea for the purchaser to have new tenancy agreements drawn up, tenants are under no obligation to sign a new agreement, particularly if it takes away any previous rights they were entitled to (such as keeping pets in the property). At the very least, the purchaser should write to the tenants with the new landlord details and information relating to payment of rent. A professional letting Agent will notify the tenant of the new landlord’s address for Service of Notices pursuant to Section 48 of the Landlord & Tenant Act 1987.

Selling a tenanted property does not have to be a headache for landlords, provided they are aware of their legal obligations.