Is The Dropping Of Our Home Affecting Land Tax?

Written by Sapphire Savvy Women Group.

 

Is the dropping price of our home affecting land tax?

Firstly, no. Even though prices in property have changed to a much more affordable price it doesn’t mean land tax has changed in the slightest.

 

It gets calculated in different ways:

According to the government’s website, the rate for a single property may vary based on when you bought it and how much it cost you. For example, properties worth £40,000 or less are exempt from SDLT (Stamp Duty Land Tax). Alternatively, any property over this price must send a return, even if none is due.

 

The following rates are only applicable if it’s your first property, if not an additional 3% will be added to such for each property.

 

Let’s set an example:

If you purchase a property worth £295,000 at this point in time your rate owed will be as follows; your first £125,000 pounds you will owe 0%, this meaning you won’t have to pay taxes yet on that first part of the payment. On your second payment of £125,000 you will now owe and pay 2% this being £2,500, calculated of this following payment and for your third and last payment of £45,000 you will owe and pay 5% of such, it being £2,225. Which will add up to a total of £4,750 in taxes.

This can all be found on the government website.

 

What do people think?

As a result, this caught buyers off guard; they had hoped taxes would drop along with prices, but they couldn’t be more wrong. Taxes were not worth paying for some people given the price they paid for the property in the first place.

It is true that there is always a lot of pressure when it comes to payments, especially if you miss one. Even though they have paid on time in the past, consumers complain about how harsh the taxing system can be.

Therefore it is always recommended to manage deadlines appropriately, if possible, to avoid bad experiences. It is suggested to always make sure we are up to date with land taxing rules and regulations changes or any other things that can make everything easier.

 

How to prioritize your taxes.

To start with make sure that if you do have any late deposits that haven’t yet been dealt with, start from those. It is crucial that you pay old amounts even if you have made recent payments. This is because it will show that you are willing to settle past debts which are the ones that will put you back on their good side.

If for any reason you really cannot pay past due land taxes, you should contact the government tax department as soon as possible. This is in order to find out if you can apply for an extension to pay what is owed if you provide proof of hardship. The earlier you start, the better.

 

Conclusion:

Lower prices don’t mean better deals in taxes therefore this can leave a bad taste in buyers’ mouth, but aid others.

Through the steps in this blog, and by the way we do have helpful articles for this, just click here. It is so beneficial to be aware of where you can find the trends and statistics regarding property.

The Finance Talk – blog, posts weekly on Monday’s, where you can get the latest exclusives on what’s occurring in the housing market. As professional property investors and Educators, we make it our job to know the property business -so check on in and we have you covered.

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