Stamp Duty


Posted by Justin Allitt in Comment, March 14, 2016

Do You Have To Pay Stamp Duty When Buying A Park Home?

If you have purchased or are considering purchasing a park home either for personal use or to let out as a financial investment (or both, for that matter), it is important to first research. And then research some more.

That is, determining and subsequently finding the right park home for you or your purposes and in the right location, and at the right price may be the first three important factors to come to your mind, but they will almost certainly not be the only important factors to consider.

Being experts when it comes to promoting park home properties and offering a great range of park homes for sale, here at Sell My Group, we do not just understand this, but further understand just how imperative it is that anybody thinking of purchasing a park home realises this too. Therefore, we have decided to address and answer one of the questions we are asked and hear those thinking of or intent on buying a park home property frequently asking: ‘do you have to pay stamp duty when buying a park home?’.

To answer that question, we have endeavoured to explain exactly what stamp duty is, how it functions, and finally whether it is something potential and current park home owners need to know about – because the answer to that last question is not in question at all; anybody buying a property or land should have a basic understanding of the legalities surrounding such a sizable purchase. After all, such a big financial commitment, such as buying a park home, should not be made without understanding what it will or could cost you.

What is Stamp Duty?

Stamp duty is the term used to describe a specific kind of tax applicable to some, but not applicable to all, individuals and company or business owners who happen to own residential and / or business property or land that is located within the UK, and so governed by UK law and UK Government.

What is Stamp Duty Applied To?

Stamp duty, or to give it its full name ‘stamp duty land tax’ as such describes a sort of land tax which anybody who buys a property and / or land within the UK needs to be aware of and to understand in order to ensure they are acting according to and within the full remit of UK law when or having already purchased a property and / or land.

Stamp duty is not paid on all UK property or land or, as such, by all people who own property and / or land within the UK. Stamp Duty, like many forms of tax, is payable subject to the value of a property and / or any land purchased or owned by a person or even a company or business.

The threshold only becomes payable under UK law when a property and / or land exceeds a set amount of money or monetary value. Further, what that amount is changes depending on whether a property o land is used or intended to be used for residential or business purposes.

The current threshold in 2016 at and above which SDLT (stamp duty land tax) is applied to residential properties is £125,000. Meanwhile, because business properties and non-residential properties and / or is or are used for different reasons and are as such subject to differing regulations and laws, the threshold in 2016 at and above which SDLT is applied to them is currently set at £150,000.

So, and in conclusion, anybody who purchases a residential property which costs £125,000 or more or equally anybody who purchases a non-residential property which costs £150,000 or any amount above that figure will almost always be eligible to pay stamp duty.

When is Stamp Duty Applied?

Anybody purchasing property subject to stamp duty tax must factor that into their budget before making a purchase as stamp duty tax must send a stamp duty land tax return to the HMRC (Her Majesty’s Revenue and Customs) within 30 days of completing their purchase according to UK law.

This is one of the numerous reasons why a person intending to purchase land and / or property within the UK or completing on doing so should never do so without first employing a lawyer to assist them with their purchase. Most often, it will by your lawyer or solicitor who deals with getting, completing and return all SDLT forms. Your lawyer or solicitor will consequently and most often pay the SDLT on your behalf and recoup the money by adding it to the fees for their services which you will then pay them.

Because the laws surrounding purchasing property are so complex, doing it without a lawyer, solicitor or agent who has a thorough and up to date understanding of UK law is not just inadvisable in order to fulfil any and all of the remits of UK laws surrounding the purchase of property within the UK; to forego the expertise provided by an accredited and registered expert when purchasing UK property and / or land is to potentially and financially take a gamble on what is for most the biggest expense they will ever make in their lifetime.

Stamp Duty Exemptions and Relief

The use of a single property or numerous properties or pieces of land usually does not affect whether stamp duty is payable, though there are specific instances in which a person, business or person is exempt from paying stamp duty. There are also circumstances in which stamp duty tax relief is either offered or made available to property and / or land owners.

To learn about the conditions by which a person can be made exempt from paying stamp duty or may be in receipt of stamp duty relief, visit the reliefs and exemptions’ sub-section of the Gov.uk website. Meanwhile, to learn about stamp duty and whether it is applicable to park home properties, read on.

Is Stamp Duty Applicable to Park Home Properties?

As aforementioned, it is advisable and arguably necessary to first learn and glean an understanding of what exactly SDLT is before discussing its applicability to the purchase of a park home. Having now given some explanation of exactly what SDLT is, and assuming anybody reading this is doing so having first read the above information, it might not surprise you to learn that the answer is, no; stamp duty land tax is not normally applied to park home properties, irrespective of what they are used for, where they are located or their value.

In fact, the reality that SDLT is not applicable on park homes and that they are almost always exempt from SDLT law is just one of the many reasons why so many people choose to not only purchase a park home in which to enjoy holidays and vacation time, but to live permanently. Further, because SDLT is not normally applicable to park home properties, those purchasing a park home or considering doing so stand to make a further financial saving as the purchase of a park home does not consequently an usually require the expert services of a solicitor in order to complete, though it is advisable to seek the expert guidance of a park home selling and buying agent.

Why is Stamp Duty Not Applied to Park Home Properties?

Buying a ‘bricks and mortar’ property within the UK requires purchasing the land upon which the property is built. Meanwhile, buying land itself on which to built or for any purpose of course means, buying land. As such, in both cases a person aiming to do either is purchasing land, whatever they intend to use it for, whether for residential reasons or non-residential. Then, that land will be or must be registered on the official UK Land Registry.

In contrast, when a person purchases a park home they are paying for the home itself, but not for the land upon which it resides. Because SDLT is applicabale upon any transfer or conveyance of land and as a park home owner or would-be park home owner you are not purchasing any land, no SDLT applies.

Exceptions to the Rules Regarding SDLT and Park Home Properties

There are very specific circumstances in which leasing land upon which a park home resides can affect or may require a person to refer to the official document ‘SDLTM10023 – Mobile Homes, Caravans and Houseboats’ to assess whether any responsibilities, financial of otherwise apply to them and their purchase of a park home or a lease included or separately paid for in order for that park home to be relocated or remain upon a plot of land. Therefore, anybody intending on or having already purchased a park home property may wish to give the information contained in the document, ‘SDLT10023’ a read.

In fact, it is advisable that anybody thinking of purchasing a park home reads the document and familiarises themselves with the remits of the law regarding SDLT and park home ownership before investing, as a matter of course. In almost every situation in which a park home is bought or sold though SDLT is not applicable and as such does is not a financial concern for park home owners or residents.

Further Information

To learn more about stamp duty, what it is and what it is applied to via a reputable and up to do resource, visit the official gov.uk website.

Alternatively, you can also read online, save and / or print the official HM Revenue and Customs’ Stamp Duty Land Tax Manual for free.