• 04 Sep 2024
• •
• 2 min read

Can I reduce Stamp Duty by paying the seller for something else?

Stamp Duty Land Tax (SDLT) can be a significant expense when purchasing a property, and it’s understandable that buyers might look for ways to reduce it. However, almost always, there is no simple way to reduce the amount of SDLT payable. Stamp Duty Land Tax  was introduced in the Finance Act 2003 to replace the former Stamp Duty. Since then, HM Revenue & Customs has  tightened regulations to close loopholes that might allow buyers to reduce or even avoid SDLT.

SDLT is calculated at the price that you pay for a property.

Occasionally, a buyer may think that they can pay the seller’s estate agent fees, or other expense, or even pay above the market value for a second hand item of furniture to reduce the value of a property, therefore reducing the buyer’s SDLT liability.

A simple test to determine if an expense could be subject to SDLT is to ask yourself: Would I still pay the seller for this item if I was not buying the house? If the answer is no, then the item more than likely forms part of the property’s value and therefore, subject to SDLT.  

HM Revenue & Customs can and will review the level of SDLT paid in connection with a property purchase, and if there is a discrepancy there can be considerable consequences.

However, exemptions and reliefs available depending on the type of property being bought, and the circumstances around it. Applying a relief can reduce the amount of SDLT payable.

We strongly advise you to obtain specialist tax advice if think that any SDLT exemptions or reliefs might apply to your purchase.

If you are looking for conveyancing services in the South, our expert residential property solicitors in Bournemouth, Poole, Southampton, Salisbury and Winchester are ready to provide you with the legal help and guidance you need. Please contact Partner and Property Solicitor Lucy Spollin on 01202 339006 or get in touch here.