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Does the cost of extras included in the sale alter the price of stamp duty?

  1. Daniel from Northampton
  2. 31 March 2014
  3. Conveyancing questions and answers

Question

I’m buying a home from a property investor who has been renting out the house fully furnished. The property has been offered with all the furniture included, and as a first time buyer without any furniture it would be good to be able to keep it, but the amount I would be paying for both the house and the furniture would put the price into the next stamp duty rate. Will this mean I have to pay the higher amount of stamp duty?

Answer

When purchasing fixtures and fittings as part of a residential transaction all buildings and fixtures which form part of the property are subject to stamp duty land tax whereas fittings which are easily portable or moveable are generally not. You are able to purchase the fittings or chattels from the seller under a separate heading in the contract and the apportionment for those items will not be subject to stamp duty.

HM Revenue and Customs have provided guidance in relation to the items considered to be fittings or moveable items which are not subject to stamp duty, these include items such as carpets, free standing furniture and kitchen white goods but would exclude items such as fitted kitchen units, wall mounted ovens, central heating and alarm systems.

The items being purchased should be listed and attached to the contract and the cost must be reasonable. From the information provided, assuming that the apportionment is reasonable you would not have to pay the higher rate of stamp duty, however when the transaction is underway your acting solicitor will be able to confirm.

But beware, under stamp duty land tax rules you are personally responsible for the accuracy of the stamp duty form and HM Revenue and Customs have the right to make enquiries into the accuracy of the land tax return, something they are much more likely to do if the transaction is on the threshold.

reallymoving comment:

If you would like more information about Stamp Duty, or SDLT (Stamp Duty Land Tax), as it is now called, head over to our useful article here

Mark Thompson

Mark Thompson

Mark Thompson

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