PENSIONERS FACING SUBSTANTIAL STAMP DUTY PAYMENTS
Research from an All-Party Parliamentary Group (APPG) has suggested that while a quarter of over-60s are looking to buy a retirement home, two thirds are not interested in downsizing.
However, in many cases they may find that buying a new home of similar quality to their current residence incurs a sizable stamp duty payment.
The thresholds following the Chancellor’s Autumn Statement mean that if a residential property is bought for £150,000, the transaction would demand a 2% tax payment of £3,000 and if a property is purchased for £920,000, the sale would command a substantial 5% tax payment of £46,000.
If you see your property tax obligations as a hurdle, and are facing downsizing when you don’t want to, tax mitigation with Fiducia could help make your dream home a reality.
TAX BREAKS PROPOSED FOR PENSIONERS
Following the report, proposals were made by the APPG for pensioners to be exempt from paying stamp duty.
However, the move would only affect the rate on properties valued between £125,001 and £250,000. If you were looking into buying a retirement property, you would still need to pay stamp duty land tax on property valued higher than £250,001.
The structure of banded thresholds was first introduced in 2003 under the Finance Act, and amendments made with immediate affect following the Chancellor’s 2014 Autumn Statement.
Although the removal of stamp duty for pensioners would initially mean less tax being collected, the knock-on effect of increasing property sales should result in increased tax revenues for the government.
MITIGATING YOUR STAMP DUTY WITH FIDUCIA
Stamp duty has come under fire since its introduction from MPs and buyers, but by working with Fiducia, you could make your dream retirement home a reality.
Fiducia can help manage your stamp duty obligations using efficient and compliant solutions, so you can buy the property you want without the need to downsize.
We can ensure you do not pay more tax on your property than is necessary. Contact us or call on 01625 599 200 to find out more.