Stamp Duty - property value or price paid?

RichardB1

Hi, can anyone tell me if stamp duty is based on the value of a property or the price paid?

Thanks :j (though why I'd jump for joy at this tax is beyond me!)

mynameisdave

Price paid.

casperlarue

Its based on the price paid

ceh209

My understanding was that it's on the market value. Which is _normally_ the price paid, but HMRC could charge it on higher if you deliberately sell it for lower IYSWIM.

They're hardly going to investigate a property sold for 240k and say 'actually we think this is worth 255k so you owe us more stamp duty' as HMRC aren't property valuers, but sell for £100k when it's worth 500k and they could come after you.

G_M

Hmmm. If you want a 2 word answer then 'price paid' is relatively accurate.

However as with all things tax-related, it's actually a lot more complex. See here.

RichardB1

Thanks for the replies folks...never straightforward is it! I've paid about 5% above the asking price (I'm in Scotland so subjected to 'offers over') so was hoping it'd be based on value. Ah well

ceh209

Haha I can see that one going well....

Hello Mr HMRC, I paid over market value for this house, can you be nice to me and let me pay less tax?

Err, NO! Sorry! :rotfl:

G_M

ceh209 wrote: »

Haha I can see that one going well....

Hello Mr HMRC, I paid over market value for this house, can you be nice to me and let me pay less tax?

Err, NO! Sorry! :rotfl:

:T :T :T :T :T

I wondered what was behind the question. Expected it to be the reverse ("I'm paying below 'market' value"). But this way round? I'm sure you'll be ably to persuade that nice HMRC man......

:rotfl:

googler

RichardB1 wrote: »

Thanks for the replies folks...never straightforward is it! I've paid about 5% above the asking price (I'm in Scotland so subjected to 'offers over') so was hoping it'd be based on value. Ah well

So you're saying you've just offered / concluded missives on / settled (I can't tell which) at a level just above a stamp duty threshold, and now you're wondering why you might have to pay the stamp duty appropriate to this level?

Why on earth isn't YOUR solicitor advising you on this? That's what you're paying him for.

Your solicitor absolutely, definitely should NOT be making an offer on your behalf, just above a stamp duty threshold without covering the implications of that offer with you.

Richard_Webster

It is generally calculated on price paid unless it is an arms length transaction deliberately engineered to avoid SDLT.

So Mum and Dad sell house to son and daughter an law for less than real value because they want to gift them part of the value SDLT only paid on actual price.

However if two strangers A and B decide to do a house swap. A's house is worth £300K and B's £175K. B buying A's would be paying 3% on £300K = £9,000 and A buying B's would be paying 1% on £175K = £1750.

They try to be clever and decide that they will price A's at £250K and B's at £125K thereby preserving the cash difference and they then think they will together save a lot of SDLT - that's the kind of case where values are looked at.

Of course if the figures were £255K and £130K they might well get away with it because it would be a matter of opinion whether those figures were accurate values anyway.

Arthritic_Toe

Isn't the value set by the price it would sell on the open market? And its just sold for what you paid for it on the open market...