Struggling with stamp duty? You can delay it

Updated
Stamp duty costs 'add up to £9,644'
Stamp duty costs 'add up to £9,644'



House prices are on a seemingly endless upwards trajectory and scraping a deposit together is tough enough, not to mention the burden of stamp duty. But there is something you can do about the latter.

With the average house prices around £273,000 in the UK finding a 10% deposit of £27,300 is hard work. And in London, where the average property costs £500,000 – a £50,000 deposit is even tougher to come by.

If you've managed to get the deposit together then well done, but you now have another hurdle to face: stamp duty.

It's a dreaded tax and one that takes a real toll, especially when you're paying for solicitors and surveyors as well.

Even though stamp duty reform has halved the tax paid on the average £273,000 property – taking it from around £8,200 to £3,650 – it is still a substantial sum to find.

However, if you're struggling with the cost of buying, you could delay your stamp duty payment for a year.
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HM Revenue & Customs requests that stamp duty be paid in the 30 days after contracts are signed in a house purchase, but what happens if you don't? Well, if you pay the tax up to 12 months after the contracts are signed then HMRC will levy a small fee – 10% of the duty - capped at £300.

Of course, it's £300 you could save yourself by paying the stamp duty straightaway but if you are struggling to pay the duty within the 30 days, it is always an option to delay. There are plenty of times that I have heard of people being forced to make a counter offer on a property and find a bigger deposit to back it up – and the stamp duty pot often gets raided to fund it.

Rather than putting your stamp duty on credit card (which I know some have done), why not delay the payment – it gives you a year to save and the penalty imposed by HMRC is likely to be far less than the charges your credit card levies.

If you are really struggling to buy a home though, I would first reconsider whether you can afford the property you are purchasing, especially when an interest rate rise looms around the corner. But for those who need a couple of months' grace to get themselves together, paying a fine may be the less painful solution.

Autumn Statement: Stamp Duty Cut - What Does It Mean for You?
Autumn Statement: Stamp Duty Cut - What Does It Mean for You?


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