• Home
  • About
  • Recommended Reading
  • Disclaimer
  • Privacy Policy
  • Advertise / Contact

Invest It Wisely

Maximizing your EV in life

  • Home
  • Growing Your Wealth
  • Small Business Solutions
  • Healthy Living
  • Miscellaneous

How Does Stamp Duty Land Tax 2020 Work for Landlords?

By Mich

tarraced houses victorianWhen you’re a landlord in today’s economy, there are a lot of legalities you need to be aware of. One of them is stamp duty land tax 2020.

So, what exactly is stamp duty land tax 2020 and how does it work for landlords? Here, you’ll discover everything you need to know about the tax and how it could impact you.

What is Stamp Duty Land Tax 2020?

Stamp Duty Land Tax (SDLT) is a type of tax you pay when you purchase a property over £125,000 for residential properties and £150,000 for non-residential properties. It only applies to landlords in England and Norther Ireland. Those in Scotland and Wales pay a different type of tax.

You have to pay the tax if you purchase a freehold property, a shared ownership property, or when you buy an existing or used leasehold. You’ll also have to pay if you have land transferred to you as a type of payment.

You will also need to pay SDLT if you pay more than £40,000 for a second home. It doesn’t matter whether you are paying through a mortgage or outright either.

How much will you need to pay?

How much stamp duty you’ll need to pay will depend upon several factors. There are different stamp duty bands, and the tax is calculated using the band, alongside the purchase price of the property.

If the property was up to £125,000, you won’t have to pay anything. If it cost from £12,.001 to £250,000, you’ll pay 2% stamp duty. For properties priced £250,001 to £925,000, you’ll pay 5%. Then for properties worth £925,001 to £1.5 million, you’ll pay 10%. Any properties over £1.5 million result in a 12% stamp duty tax.

Those who are buying a second home will face higher stamp duty tax 2020. For each band, you’ll need to pay an extra 3% on top of the existing tax rate if you’ve purchased a second home or a buy to let property.

Understanding stamp duty relief

There is good news for first time buyers in the form of stamp duty relief. This means, if you’re purchasing your first property up to £300,000, you won’t need to pay any stamp duty tax. If you were to buy a property for £500,000, you’ll only pay stamp duty on £250,000 of it.

However, if you are a first-time buyer and you purchase a property over £500,000, you won’t qualify for stamp duty relief.

It can help to seek professional advice when purchasing a new property to ensure you know how much stamp duty tax you need to pay. There are a lot of things you need to consider as a landlord such as landlords insurance from Homelet, deposit schemes and your obligations. However, it’s easy to forget about stamp duty tax liabilities.

If you are considering buying a new property, it’s worth researching everything you can about stamp duty tax. You’ll also want to make sure you’re following up to date advice as the regulations can change with each passing year. 

Related Posts Plugin for WordPress, Blogger...

Filed Under: Growing Your Wealth

About Mich

Mich is your typical middle class guy with a house and 2 kids minus the dog. He works in the IT industry and likes to muse about how to achieve more for less when it comes to money.

About Invest It Wisely

Invest It Wisely is about evaluating the choices that each of us face everyday. It’s about investing your time, your money, and your energy wisely, in order to achieve your goals. The end goal is maximizing your life expectation, and exploring the ways to get there.

Subscribe!

Subscribe via RSSSubscribe via EmailSubscribe via TwitterSubscribe via Facebook

Most Popular Posts

  • How to Get Fit, Feel Better, and Get Rid of Your Foggy Head: A Few Simple Steps
  • 3 Frugal Ideas for a Romantic Valentine’s Day
  • What Would You Do with a Million Dollars?
  • The Importance of Opportunity Costs, and Why They Should Not Be Ignored
  • What Do You Need to Get out of the Rat Race and Achieve Financial Freedom?

Categories

  • Avoiding Scams
  • Book Reviews
  • Crypto Trading
  • Currency Trading
  • Economics
  • Financial Freedom
  • General Reviews
  • Growing Your Wealth
  • Healthy Living
  • Insurance
  • Interviews
  • Investing
  • Market Analysis
  • Miscellaneous
  • Motivation
  • Opinion
  • Paying Down Debt
  • Philosophy
  • Precious Metals
  • Reader Questions
  • Real Estate
  • Relationships
  • Saving Your Money
  • Small Business Solutions
  • Stories
  • Uncategorized
  • Weekend Reading

Archives

Invest It Wisely Copyright © 2016
Creative Commons License
This work by Invest It Wisely is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License
Permissions beyond the scope of this license may be available at http://www.investitwisely.com/contact