Stamp Duty Explained

Stamp Duty

Stamp Duty

It’s one aspect of buying a home that still causes confusion for many of our home buyers at Redstones – Stamp Duty. Therefore, we believe that understanding how it works is vital to avoid the mistake that some people make of not budgeting for Stamp Duty when purchasing a new home.

Starting in the UK in 1694, Stamp Duty is essentially tax paid to the Government for changing the documents that specify who owns a property.

Bear in mind that Stamp Duty is not paid on the first £125,000 of a property’s value. It is a tiered tax, which means that you pay a percentage on portions of the value over £125,000.

These tiers are:

  • 0% on the first £125,000 paid
  • 2% on property prices between £125,001 and £250,000
  • 5% on property prices between £250,001 and £925,000
  • 10% on property prices between £925,001 and £1,500,000
  • 12% on property prices of £1,500,001 and over

 

The amount that needs to be paid depends on the portion of the property price that falls within each band. For example, if you were buying a £260,000 property, 2% would be paid on the £125,000 to £250,000 part of the purchase price and 5% stamp duty would be paid on the remaining £250,001 to £260,000. This amounts to Stamp Duty of £3000. If that’s simply too much calculation for you, use the HMRC’s online Stamp Duty calculator, so that you understand exactly how much you will need to pay.
The next steps are to submit a Stamp Duty Land Tax (SDLT) Transaction Return and pay any Stamp Duty owed within 30 days to the HMRC. Otherwise, you could face a fine or interest on overdue payment. In reality, the entire process is something a solicitor can assist with.

Some mortgage companies allow you to add stamp duty to your mortgage. However, we would advise that it’s better to pay Stamp Duty upfront, as any amount you add will accrue interest at the same rate as the rest of your mortgage borrowing.

To sum up Stamp Duty – it’s an unavoidable cost of moving! Stamp Duty should always be considered as an additional cost if the property you intend to buy is over £125,000. However, if you are purchasing a Right to Buy property or buying multiple properties at the same time, some tax relief may be available.

Now that you’ve considered Stamp Duty, visit the Redstones website for more information on buying a home.

Redstones Earle Kenlay

Make owning your own profitable property business a reality

Ever wanted to place your destiny in your hands and operate your own successful business, without the risk of starting a company from scratch? It’s a dream that many professionals have and one that is turning into reality for Redstones franchisees.

A specialised team of professionals from diverse backgrounds have achieved their dream of running a profitable property business as a Redstones franchisee and the latest member of this team is Earle Kenlay, who has just opened a Redstones office in Hale & Altrincham.

Having previously worked as a senior manager for a high profile clothing retailer, it was his commitment to high levels of customer service, quality and value that ensured he was an excellent fit for the Redstones brand. After 20 years of working in the clothing industry, embracing the world of property has been a refreshing challenge for him too!

Whilst researching and making a final decision over which franchise he would choose to pursue his ambition of running his own business, Redstones stood out for many reasons.

Earle says, “The ethos of Redstones in terms of the service it offers to customers matched my own aspirations, meaning it would be easy to work to the brand’s guidelines. Furthermore, business terms and the size of territory on offer, as well as the subsequent scope of the business were far better than the rest.”

He continues, “Ultimately, it was Manjit Virdi, the Franchise Owner along with existing franchisees, who really sold it to me. Manjit was always available to answer any questions or concerns in an honest and open way and there was never any hard sell or pressure to sign up. The other franchisees I spoke to were just the same, giving their honest opinions and advice. They are all highly committed and driven to succeed – another trait that I was drawn to.”

Earle has found the training he’s received to be very thorough but it was completed at a pace he was comfortable with. He’s now all set to grow and expand the Hale & Altrincham office to fully maximise sales and profits, with the aim of being recognised as best in class. If they were available, he would be able to expand into surrounding territories too.

For those interested in following in Earle’s footsteps, his valuable advice is that individual’s shouldn’t take the easiest or cheapest option. Earle states, “Once you’ve decided that franchising is for you, take your time and research as many franchises in your chosen field as possible. The franchise you eventually choose must match who you are and what you really want from it.”

Find out what’s involved in becoming a valued Redstones franchisee and join our network of successful business owners.

Smoke Alarms

How we’re keeping tenants safer

New legislation that came into force on 1st October 2015 has made it compulsory for all landlords to fit smoke alarms and carbon monoxide detectors into their rented properties.

The new rules mean a smoke alarm must be installed on each floor of a property used as living accommodation. A carbon monoxide detector should be fitted into any room with a solid fuel appliance, such as an open fuel fire, wood burning stove or kitchen equipment such as a solid fuel Aga.

In addition, landlords are required to check that all smoke alarms and carbon monoxide detectors are in working order when a new tenancy begins and these checks should be conducted periodically.

Failure to comply with these new rules could lead to a penalty charge of up to £5000.

Exclusions to the new law include Houses in Multiple Occupation (HMOs), hostels, care homes, hospitals, hospices and student halls of residence.

These new rules align private rented properties with existing building regulations for new homes, which require the installation of smoke alarms. The legislation is part of the government’s efforts to improve safety standards in the private rented sector.

With a person being at least 4 times more likely to die in a fire if there is no working smoke alarm installed, Redstones have embraced the enhanced tenant safety this new law will help to ensure.

In fact, going above minimum safety measures, we are advising all landlords with properties that use gas to install a carbon monoxide detector, as well as smoke alarms if they haven’t installed them already.

We have pro-actively contacted each of our landlords and have assisted them in installing smoke alarms and carbon monoxide detectors. As a result, our landlords ensured the right safety measures for their tenants well in advance of the 1st October deadline.

If you’re a landlord and require assistance to understand how the legislation will affect you, don’t hesitate to contact Redstones today.