The UK has officially fallen back into a technical recession, however, the truth for many is that the last few years have been an extremely tough time and that even low economic growth did little to ease their problems.
A toxic mix of low wage growth, rising inflation, job losses, repossessions and the rising cost of living have combined to make life very difficult for a large number of people.
One of the biggest casualties of the economic downturn has been mortgage lending, with first-time buyers hit especially hard. To compound their problems, the first-time buyer exemption from stamp duty came to an end in March, meaning those looking to get a foot on the ladder must pay the same rates as everyone else.
If you have managed to save for a deposit and intend to buy a house in the near future, did you know you could potentially save thousands of pounds through stamp duty mitigation schemes?
Few people are aware of the potential savings that can be made through stamp duty mitigation and end up paying the full amount.
You, on the other hand, can explore it and see if there is any chance you can reduce or avoid stamp duty fees.
What is stamp duty mitigation?
Stamp duty mitigation is the term used to describe plans drawn up by tax experts that take into account the value of the property in question and your personal circumstances and how, under UK law, you can reduce or avoid paying SDLT.
Is stamp duty mitigation a form of tax evasion?
Stamp duty planning is not the same as tax evasion.
The tax experts that put together these schemes do so by interpreting UK tax laws and devising plans that are in full accordance with the law.
How much could I potentially save?
How much you can save will depend on various factors.
At present, no stamp duty is charged on transactions on properties under £125,000.
Homes costing between £125,001 and £250,000 incur a one per cent rate, which rises to three per cent for homes in the £250,001 to £500,000 bracket.
Those costing between £500,001 and £1 million will be charged a four per cent rate, while a five per cent rate is levied on transactions involving homes priced between £1 million and £2 million.
Anything above £2 million will incur a seven per cent rate, which increases to 15 per cent for corporate bodies.
Potential savings of £2,500 are available for homes costing £250,000, while you could save £15,000 on properties up to £500,000. If the price is £1 million, you may save as much as £40,000, which rises to £100,000 if the property costs £2 million.
Again, how much you could potentially save will depend on several factors and the nature of the scheme you use.
What else do I need to know?
It is important that if you decide to seek help to avoid stamp duty that the scheme satisfies certain criteria.
You should ensure your ability to obtain a mortgage is not affected and that the scheme is given the green light by a leading tax QC.
The firm in question must be able to demonstrate an impressive track record of success and that where its schemes have been challenged by HMRC that they have defended them successfully.
The money you may save on stamp duty can be put to so much use, from paying off debts to helping family members, so it is something that may be worth your while exploring.
