Do I have to pay Stamp Duty when downsizing?
We Buy Any House
Like you, every property is unique, so we’ll just need a few details before we can make you an offer.
Do I have to pay stamp duty when I downsize?
Your properties value: The amount you pay:
Up to £125,000 None
£125,001-£250,000 2%
£250,001-£925,000 5%
£925,001-£1.5million 10%
Anything above £1.5million 12%
When you’re downsizing your property, you need to make sure you’re making the right choice. This means that at the end of the process, the move will provide you with the financial comfort you’re aiming for.
Get a cash offer for your house today!
What taxes do I have to pay when I downsize?
While it can be simple to look at the difference between property values and assume that downsizing will help free up your finances, there are plenty of other costs and taxes that could swiftly cut into these profits. One example of this is the Stamp Duty Land Tax, which typically must be paid on most property transfers.
In England, the Stamp Duty threshold is currently £125,000 for residential properties and while downsizing may lead to a property that is valued lower than that, it’s important to know if you’ll have to pay. The amount of Stamp Duty you’ll have to pay depends entirely on the value of your house and the bands currently stand at:
So, if you were moving into a property worth £150,000, you would fall into the 2% bracket and the total amount of Stamp Duty tax to pay would be £3,000.
While it is unlikely that anyone downsizing will be moving to a property that reaches the 10% band, knowing how much you are set to pay can help you calculate the extra costs that come alongside a new house.
If you’re looking to downsize your property to free up some finances, then you need to make sure that the various taxes and charges don’t eat into your funds too much. Alongside, it’s vital to realise that if you are downsizing for financial purposes, then just moving to a smaller property may not be the answer.
What affects the value of a property?
There are many external factors that can affect the value of a property, from the local schools to the nearby transport links. So, just because a house that you’re looking to downsize to is smaller than your current house, it doesn’t always mean that it will help you free up any financial assets that you may be hoping for.
By weighing up all the extra factors such as Stamp Duty, Capital Gains Tax and solicitor’s fees, you can ensure that no matter the reason you’ve decided to downsize, you can ensure you’ll be living comfortably in your new house.
If you’re trying to downsize and are struggling to sell your current house, contact We Buy Any House today for a free quote on your property and see how quickly we can get you into your dream house.
We buy any home in as little as 7 days, or timescales to suit you. Head to our website for more information.
Back to all articlesYou may also be interested in
-
Moving House Checklist: Your Ultimate Guide for 2024
Moving to a new home can be exciting, but it also comes with its own set of…
-
09, September, 2024Valuing an Inherited Property
A Friendly Guide to Inheriting and Valuing Property Inheriting a property can be a mix of emotions.…
-
09, September, 2024Selling an Inherited Property in Poor Condition
Inheriting a house can feel like a blessing, but when that property isn’t in the best shape,…