Spring is a popular time of year to consider property sales and purchases. Buying and selling a property can be a minefield of costs and expenditures and, when adding tax liabilities to the mix, your costs can mount up quickly. We have put together some tax information for you to consider when buying or selling your property.
Taxes you may need to pay:
- Stamp Duty Land Tax when you buy a home in England
- Land Transaction Tax when you buy a home in Wales
- Capital Gains Tax when you sell a home
Stamp Duty Land Tax
You usually pay Stamp Duty Land Tax (SDLT) if you buy land or property for more than £125,000. If it’s your first home, you don’t have to pay tax if the property is £300,000 or less.
The rate you pay depends on the following ;
- The purchase price of the land/property.
- Whether it is residential, non-residential or mixed use.
- Whether you’re a first-time buyer.
You still have to pay if you swap something of economic value for a property, eg shares or another property.
Capital Gains Tax
You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:
- You’ve lived in it as your main home for all the time you’ve owned it
- You haven’t let part of it out or used part of it for business only
- The grounds, including the buildings, are smaller than 5,000 square metres (just over an acre)
This is because you get tax relief called Private Residence Relief, which reduces any gain to nil.
If you don’t meet all these criteria you may have to pay some Capital Gains Tax.
Contact us if you need further advice on property sales, particularly if you have ever let the property concerned.