Stamp duty warning

Up to April 2009 Stamp duty was levied when contracts were signed and not on completion of the property sale.

In the Summer of 2008 many purchasers started holding back on signing contracts as the government said that they were going to review stamp duty - which they did by temporarily raising the threshold from £125,000 to £175,000.

This temporary increase in threshold applies to to transactions made between 22 April 2009 and 31 December 2009 inclusive.

The rules have now changed so that the purchasers have to pay stamp duty on completion, instead of when contracts were signed.

What does this mean? Anyone who is arranging mortgages on new build properties thinking they are exempt from stamp duty because the 'deal is in progress' may have to pay stamp duty after all if the build does not complete until early 2010. The stamp duty threshold will have been reduced at this stage from its current level of £175,000 back to £125,000, and many of these buyers will fall into the trap of having to pay stamp duty when they thought they would be exempt.

For purchasers and first time buyers - you need to get your purchase completed in time to avoid the lowering of the stamp duty threshhold. Remember, stamp duty on a £150,000 property will then cost you an extra £1,500.

For further clarification please view BN45 Stamp Duty Land Tax

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