When purchasing a property in London, there are several taxes you may be required to pay. Here are the most common ones:
1. Stamp Duty Land Tax (SDLT) – This is a tax payable on most property purchases above a certain price threshold. The amount of SDLT you pay depends on the purchase price of the property, as well as other factors such as whether you are a first-time buyer or buying an additional property. The rates for residential property purchases are as follows:
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Up to £125,000: 0%
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£125,001 – £250,000: 2%
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£250,001 – £925,000: 5%
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£925,001 – £1.5 million: 10%
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Above £1.5 million: 12%
2. Council Tax – This is a tax payable to the local authority where the property is located. The amount you pay depends on the valuation band of the property and its location.
3. Service Charges – If you are buying a leasehold property, you may also need to pay service charges to the landlord or a management company. These cover the cost of maintaining and managing shared areas of the building, such as the grounds, lifts, and communal spaces.
It is important to budget for these taxes and fees when buying a property in London, as they can significantly affect your total purchase cost. Your solicitor or advisor can provide further guidance and advice on which taxes and charges apply to your specific purchase.