Stamp Duty in the UK: A Guide for US Buyers

If you are from the US and are looking to buy a home in the UK, you will need to know a bit more about the housing market than the US vs UK discrepancy about what the ‘first floor’ is!

Stamp duty is a core part of buying a home in the UK, but if you are from the US, you will need to learn about this area of UK real estate before diving into purchasing a home. 

What Is Stamp Duty?

In layperson’s terms, stamp duty in the UK is a tax applicable to properties worth over £250,000. If you are a first-time buyer in the UK (and you are from the UK), any properties worth under £250,000 won’t have any tax duty on them.

However, international law of real estate and international house buyers have a few additional bits to pay and a few more hurdles to get over! So, here is a quick stamp duty guide for homebuyers who are not residents of the UK.

Stamp Duty Land Tax for Non-UK Residents

In April 2021, the rate of stamp duty land tax was altered and is now about 2% points higher than purchases made by UK residents. 

There is a test that you can undertake which will establish whether or not you are a UK citizen. If you have the ‘right to reside’ in the UK, usually under a visa, this is not relevant to the stamp duty land tax. If you have become a citizen of the UK, this is not relevant either.

The test that is important is whether or not you were present in the UK for at least 183 days during the 12 months leading up to the purchase. So, you will need proof of address or bills from that period sent to an address in the UK.

Marriage is also an option, provided you have married a UK resident. You will have to showcase here that you have been residing in the UK for 183 days before the purchase of the property, and you will have to ensure that your marriage certificate is valid. 

Stamp Duty Rates for Non-UK Residents

Now, on to the bit. Most people are interested in the tax rates!

If you are looking to buy a home in the UK as a non-UK resident, if the house is worth £250,000, you will need to pay 2%, which is £5,000. If the property is worth £250,001-£700,000, then the rate you will pay is 5%. 

If you have resided in the UK for 12 months following 26 October 2022 and you are charged this amount on a property, you should check into your eligibility for a refund of the surcharge.

This is just a brief guide, and, as is always the way, you should look to speak to a conveyancing solicitor before you make any purchase on a home, especially if you have unique circumstances that may present further obstacles. 

Good luck in the purchasing of your new home!

Disclaimer: For more interesting articles visit Business Times.