When buying property a cost that you must account for is stamp duty. It is payable on top of your deposit and other professional fees and will be requested, by your solicitor, before exchange.
Often when budgeting for a house purchase it is a cost that’s overlooked, however we would suggest that you should look to save for it at the same time as putting away cash for a deposit. As you start looking for properties within your set budget also use tools such as HMRC’s or Money Saving Expert’s stamp duty calculators. Just type in the purchase price of the house and click calculate and it will show you your stamp duty cost.
As of January 2016 the rates payable for stamp duty on residential property are as follows:
Up to £125,000: Zero
The next £125,000 (the portion from £125,001 to £250,000): 2%
The next £675,000 (the portion from £250,001 to £925,000): 5%
The next £575,000 (the portion from £925,001 to £1.5 million): 10%
The remaining amount (the portion above £1.5 million): 12%
In our blog New Years Resolutions: Saving for your dream we gave you tips for saving for your dream property and being able to buy it by the end of the year. Today we came across a good challenge (source: unsure) which, if you are diligent, could also mean you have your stamp duty saved up too:
If you were to save the full £667.95 that would be enough to cover the stamp duty on a £157,500 house and the concept doesn’t seem too hard! This challenge could work for more expensive houses too just by setting the amount you are going to put in daily, or weekly, quickly you could build up savings on top of saving for a deposit. All you need to start with is a jar!
Buying a house is costly, but doesn’t have to be as difficult as it sometimes seem, you just have to have a plan and persevere with it. We hope with this blog we have sourced and given you a plan for saving for the additional cost of stamp duty, and if it isn’t going to get you enough, then it is a basis on which you can build. Even managing to save a little will go along way towards preventing any rushed saving just before you are about to buy a property.
Keep checking in with NC Real Estate’s blog, Facebook, twitter and Instagram for more tips and tricks, help and advice, on all property matters, we are here to support you.
NC
(img source – size modified for NC Real Estate)
