woman using a calculatorHome buyers in the U.K. would need a property stamp duty calculator to find out how much they need to pay, which applies to transactions worth more than £125,000.

It can be challenging to find a flat below the threshold for excluding stamp duty payments. New research shows that apartment prices in the country are increasing by £1,250 on average every month.

Property Tax

While it is quite complicated to calculate stamp duties, you can refer to taxes charged on a £300,000 property. Buyers need to pay a £5,000 stamp duty for purchases within this price bracket. You won’t have to pay any taxes on the first £125,000, but there is a 2 per cent fee for the next £125,000 and a 5 per cent fee on the remaining £50,000.

This may seem expensive, but take note that you have 30 days to settle property taxes before the government may charge you of penalties and interest. First-time homebuyers are exempted from stamp duty for a £300,000 purchase, but it’s possible that they would find it hard to look for cheap homes as prices continue to increase in the country.

Rising Prices

Average flat prices rose to more than £232,000 in 2018 from just £157,000 in 2013. Apartments only account for around four out of 10 sold properties, but they are quickly outperforming sales of terraced or semi-detached houses.

Flat sales rose 48 per cent in the last five years compared to 39 per cent for non-apartment transactions. If you are looking for a detached house, be prepared to spend around £348,000 on average. Home buyers during the first quarter paid this amount.

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Conclusion

Most buyers overestimate the price they need to pay for stamp duty, which could be a reason why they become discouraged to pursue a transaction. By knowing a simple way to calculate taxes, home purchases would be much easier.