Q. I am about to buy a house and am unsure about stamp duty land tax. What is it exactly?

A. Stamp duty land tax (SDLT) is the tax anyone buying property or land costing over £125,000 must pay.

This includes anyone who is buying a freehold property, new leasehold or anyone buying through a shared ownership scheme, and is still colloquially known as stamp duty.

How much you pay will depend on whether the land is residential or non residential.

You must send an SDLT return to HM Revenue & Customs within 30 days of completing the purchase of your house.

SDLT is calculated at a percentage of your property’s value. For example, if you purchase a house costing between £125,001 and £250,000, you would be charged two per cent of the final value. SDLT on a house valued at £275,000 would be £3,750.

Your solicitor will be able to advise you on the amount of SDLT you will be paying. You can also double check by using the HMRC SDLT calculator.

A solicitor will prepare a financial statement and collect stamp duty to pay on your behalf before the completion of the sale. After completion your lawyer will fill out any necessary paperwork to be sent to HMRC.

Sometimes there is an additional charge for this. However, having a solicitor fill the forms out on your behalf can save you time and eliminates the risk of mistakes being made.

There is a penalty fee if SDLT is not paid within 30 days. Usually your conveyancing lawyer will keep you updated, but it is a good idea to make sure that the tax is paid, as otherwise you will be responsible for the fee.

Often people overlook SDLT when moving house. However, there is no way of avoiding paying the tax.

It may be tempting to look for ways of minimising it, but your lawyer will be able to advise you on safer, sensible options rather than falsely advertised offers, such as deals to reduce your stamp duty liability.

Sometimes a mortgage lender may offer to cover the costs of stamp duty tax, or your building company may offer an allowance against the house sale price. It is advisable that you always consult your solicitor – they can advise you as to whether it is a financially sound offer.

The process can be confusing, especially if dealing with many other forms in relation to the sale of a house.

However, an experienced conveyancing lawyer will be able to help make the process as stress-free as possible.

For further queries, contact me at tim.jordan@fdrlaw.co.uk or on 01925 604713.