Aside from certain transfers, there are three stamp duty exemptions currently in place.
The first is known as Disadvantaged Areas Relief.
As the name suggests, Disadvantaged Areas Relief sees you avoid stamp duty if you buy a property in an area designated by the government as disadvantaged. The threshold for this relief is £150,000.
You can also avoid paying stamp duty if you buy a house in any area that costs below £125,000.
The third exemption concerns zero-carbon homes.
If you buy a zero-carbon home under £500,000, you will be excused stamp duty altogether. Should the price be above the £500,000 threshold, you will have your bill cut by £15,000.
Much has been made of the threat of climate change and the steps individuals need to take to reduce the amount of carbon we emit into the atmosphere.
The UK government has set some lofty goals to be achieved in the next few years, one of which is to make sure all new build homes are zero-carbon from 2016.
So, what exactly is a zero-carbon home?
The government’s definition of a zero-carbon home is as follows:
“[A] home that can be connected to mains electricity and gas but needs to have sufficient additional renewable power to cover the average consumption of a house over a year.”
Essentially, a zero-carbon home is one that returns as much power as it uses to the National Grid, with homeowners being paid by the government for any excess power fed into the grid.
The question is, how does a house generate enough renewable power to sustain the average family for a period of 12 months? The answer is through microgeneration technology.
Microgeneration technology includes mini wind turbines, wood pellet burners and solar panels, in addition to new technologies coming onto the market.
However, generating the power to heat your home is only part of the equation.
The heat you generate has to be kept inside the home, meaning you need to have sufficient insulation.
Indeed, the government states:
“The fabric of the building has to be insulated and built to very high standards.”
The range of measures zero-carbon homes can include range from triple-glazed windows, super-insulated walls, geothermal heating systems and rain water collecting tanks.
Zero-carbon homes remain few and far between in the UK, however, their numbers are steadily increasing.
While such homes could deliver long-term savings in terms of energy costs, the picture with regards to stamp duty is not as straightforward as might appear.
The stamp duty exemption only applies when a zero-carbon home is purchased for the first time, meaning that if you were to buy one second hand, you would still have to pay the full amount of stamp duty.
However, you could still avoid stamp duty or reduce your bill significantly through a stamp duty mitigation scheme.
Mitigation is a completely legal way of reducing your stamp duty liabilities and has been used by homebuyers for several years.
Many firms offering stamp duty mitigation schemes operate in the UK, so you have plenty of choice.
It is important to speak to various companies to see what they can offer you as opposed to choosing the first one you see.
There are no guarantees that you could reduce your stamp duty bill through a mitigation scheme, however, it may be worthwhile to explore nonetheless.
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