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  This is Money's guide to stamp duty: how much you will have to pay and whether you can avoid it About stamp duty Stamp Duty Land Tax was introduced in December 2003 and replaces the old stamp duty on purchases of flats, houses and other land and buildings. It is a percentage paid on the purchase of a home or non-residential property, graded into bands. The bands for the tax year 2010/2011 are 0% paid at 0 - £125,000, 1% paid on properties costing between £125,000 and £250,000, 3% between £250,000 and £500,000 and 4% for more than £500,000. The bands were changed in the 2010 Budget. First-time buyers can secure a two-year temporary stamp duty relief up to £250,000, from 25 March 2010. A new 5% threshold above £1m was introduced from 6 April 2011. How stamp duty works It is paid on the whole value of a property, so if you buy a property costing costing £251,000, you would pay £7,530 not just the amount over the threshold as you would do with income tax. This jump mea

The super-rich are costing the taxpayer up to £1billion a year by exploiting a legal loophole which allows them to avoid paying stamp duty when selling their exclusive homes - meanwhile, ordinary families are paying tens of thousands of pounds simply to move home. The tax dodge involves transferring ownership of a property to an off-shore company so when it comes to be sold the buyer purchases the company as a whole assuming de-facto ownership of the property. This means that while a family buying a home costing £400,000 would pay £12,000 to the Government, a multi-millionaire buying a luxury pad could pay nothing. Tax dodge: All the homes on London's exclusive Cornwall Terrace have been transferred into offshore companies Because the deal is classed as a corporate transaction as opposed to a property sale there are no stamp duty obligations involved. The extent of the avoidance was revealed in a Times report. Repeated crackdowns on stamp duty dodgers have been announce

A crackdown on tax avoidance centred on hundreds of billions of pounds of property placed offshore is expected to be unveiled within months. Chancellor George Osborne is expected to take action to close a loophole that has allowed wealthy homeowners to dodge stamp duty when they sell a property, by placing it in an overseas tax shelter. But Liberal Democrat plans for a mansion tax – pushed again by Business Secretary Vince Cable yesterday – are not expected to be included in the Government’s March Budget. Property loophole: A Crackdown on tax avoidance centred on hundreds of billions of pounds of property placed offshore is expected to be unveiled within months More than £100billion of property in central London alone has been placed offshore beyond the reach of the taxman, costing the nation  billions in lost revenue. The scheme enables the rich to avoid the 5 per cent stamp duty charged on properties worth more than £1million.   More... Cable says 'mansion tax' plan i

The cost of moving house has soared by 70 per cent in the last 10 years and now stands at £9,000. The rocketing financial burden has even outstripped the rise in house prices over the same period, according to a new report. It means house moving costs are now equivalent to 27 per cent of average UK gross full-time wage, up from 22 per cent in 2001, putting further financial pressure on already cash-strapped families. Getting bigger: The cost of moving has risen at a rapid pace, faster than both house prices and inflation For families caught by the three per cent stamp duty trap the cost is even higher with those buying a property costing more than £250,000 instantly hit with a tax bill of at least £7,500. That means those in the South East pay an average of £16,500, while London home movers pay £19,500, a Lloyds TSB report said.   More... Why we're no longer so keen on being green: Number of people willing to change the way they live falls by 10% Why interest rates are

The cost of the fees and taxes incurred in moving home has jumped by almost 70 per cent in the past ten years to hit £9,000 and outstripped the rise in house prices, according to a new report. And for families caught by the 3 per cent stamp duty trap, the costs involved with simply moving house have soared much higher – with those buying a property costing more than £250,000 instantly hit with a tax bill of at least £7,500. That means those in the South East pay an average of £16,500, while London home movers pay £19,500, a Lloyds TSB report said. Getting bigger: The cost of moving has risen at a rapid pace, faster than both house prices and inflation With mortgage lenders demanding big deposits or substantial equity for the best rates since the financial crisis hit, the added high cost of moving has played a major part in keeping property sales stuck near record low levels. The report looked at the cost of moving home, in terms of stamp duty, mortgage arrangement fees, estate

The Government use the Budget to announce it will build more homes and overhaulthe stamp duty system to help first-time buyers rather than a mansion tax, the National Association of Estate Agents (NAEA) says. In the Budget on Wednesday, George Osborne could unveil new plans that target the 'super rich'. [more details] However, the NAEA says homeowners already face a 'heavy tax burden' which is stifling the market. The estate agent body says that property in the UK is over-taxed in comparison to neighbouring European countries and the Government should be focusing its attention on stamp duty to help get the property market moving. Property ladder: The NAEA says that the Government should overhaul stamp duty to help first-time buyers Around 45,000 homes in England and Wales are thought to be worth at least £2million and would be impacted by a mansion tax, with roughly 80 per cent located in London. Wendy Evans-Scott, president of the NAEA, said: ‘The market is st

  Imagine a Government scheme that sought to profit from pushing the price of one of life's essentials higher, that encouraged people to borrow as much as possible, and then used a deliberately unfair system to tax them on it. It sounds like a pretty daft plan for any society, let alone a heavily indebted once that needs to think seriously about what it spends. In Britain, we have exactly that sort of bonkers state-backed scheme - it's called stamp duty. Stamp duty in itself is not a bad idea, or uniquely British.What we do have, however, is a combination of stratospherically high house prices and a poorly designed stamp duty system that allowed successive governments to line their pockets rather than make it fairer. But what is urgently needed is an overhaul of a system that is unfair, economically harmful and continues to promote the belief that high house prices are a good thing. How an unfair tax system was born If you want to buy a family home in l

The Government has won a landmark case against stamp duty avoidance on buying property. A tribunal has ruled against a company, Durham-based Vardy Property Group, after it exploited a rule to avoid £290,000 of stamp duty on a 2006 purchase of a business park in Stockton-on-Tees. While the case centred on stamp duty owed on business property, the ramifications extend to tax avoidance schemes deployed when buying a houses or flats. Stamping it out: Soaring prices has encouraged a proliferation of duty avoidance schemes Vardy had tried to use 'sub-sale relief', which is an exemption designed to prevent housebuilders having to pay stamp duty twice when they buy land and eventually sell the house they have built. In his Budget earlier this year, George Osborne pledged to crack down on the 'morally repugnant' culture of tax avoidance as he cited a toughening of the rules on stamp duty. The Chancellor raised the top rate, on homes worth more than £2million from 5 per ce

Ed Balls today vowed to spend billions of pounds of taxpayers’ money on building affordable homes and a stamp duty holiday if Labour is elected – after insisting the party has nothing to apologise for on the economy. The Shadow Chancellor told his party’s annual conference in Manchester that he would use the proceeds of the forthcoming sale of the 4G mobile phone spectrum to fund the initiatives. The defiant announcement is a deliberate contrast to the approach of Gordon Brown, who used all the £22.5billion raised from the sale of the 3G spectrum to pay down the deficit, even in the boom year of 2000. Scroll down for video Getting ready for the main event: Ed Balls has make-up applied and has a quick drink before facing the media in Manchester ahead of his keynote speech at the Labour Party annual conference today On air: Mr Balls has made it clear that Labour has nothing to apologise for regarding its public spending, vowing to spend more on affordable housing Al

Borrowers looking to capitalise on cheap money flowing into banks and building societies have been delivered another round of record low mortgage rates. Both a new record low rate five-year fix and two-year fix have landed in the best buy tables over the past week, with those with the biggest deposits or largest amount of equity in their  homes once reaping the greatest rewards. The Post Office is now offering a five-year fixed rate mortgage at just 2.74 per cent for those with a 40 per cent deposit, while HSBC is offering a two-year fix at 1.98 per cent for those in a similar position. Home trap: Borrowers have seen the best fixed rates fall to new record lows - but they should beware big fees. The best tracker rates have also fallen once more, bucking a trend lasting almost a year that had seen them remain relatively stable while fixed rates fell. Once more for those with 40 per cent deposits, HSBC is now offering a lifetime tracker at 2.38 per cent (base rate plus 1.88 per c

Just when the outlook for the nation’s domestic finances seemed as it couldn’t get any worse – it has. On top of fears that one million or more ‘zombie households’ face instant insolvency the moment interest rates return to normal comes new research today uncovering a sub-category of ‘super-zombies’. These specimens of the financially undead are households unable to pay what they owe, even if interest rates stay where they are. Zombie households: These specimens of the financially undead are unable to pay what they owe, even if interest rates stay where they are More than one million households have interest-only mortgage debt totalling £120 billion on which they are currently on course to default. Some have no investment plan of any sort to pay off the capital sum. About 700,000 mortgages are in this position, with a value owed of about £75 billion. Some have a plan that on current form will be unable to clear the debt. About 400,000 mortgages fit this description, with a t

The Financial Services Authority has been heavily criticised by a committee of MPs for falling to protect thousands of Bank of Ireland customers who face their mortgage repayments doubling or even tripling in two months’ time. The City watchdog was told yesterday by the Treasury Select Committee, it must do more to ensure that customers of the bank were being treated fairly. Committee chairman Andrew Tyrie also criticised FSA managing director of the consumer and markets business unit, Martin Wheatley, for not providing enough information to demonstrate the regulator had thought carefully about the issue. Bank robbery: Bank of Ireland has told customers it will be hiking their base tracker mortgage interest rates in May despite no change in monetary policy by the Bank of England. Last month, the bank wrote to its 13,500 customers to inform them of the rate hike on their base rate tracker mortgages despite the fact that the Bank of England has held interest rates at a record 0.

Interest-only mortgage borrowers formerly with Northern Rock and Bradford & Bingley will this week receive letters demanding to know how they plan to pay off their loans. Government-controlled UK Asset Resolution, which took on the business after the lenders collapsed in 2007 and 2008 respectively, is writing to  30,000 borrowers. The capital debt on interest-only mortgages becomes repayable at the end of the term and there is mounting anxiety about where the money is to be found. Many borrowers are expected to have to sell their homes to settle the loan. UKAR’s mailing is aimed at the first tranche of implicated borrowers,  whose mortgages are payable up to 2023. It includes the message: ‘Every day is one day closer to when you will have to repay your loan in full. It is important you put a robust plan in place for when that day comes or you could find yourself in a very difficult position.’ Borrowers who do not respond will receive follow-up mailings and phone calls.UKAR spokesm

First-time buyers need all the help they can get, so read our guide to getting a foot on the property ladder and buying your first home (guide first published in May 2009). Buying a home is most people's biggest financial commitment. It can be time-consuming, expensive and frustrating. To make matters worse, horror stories abound of gazumping, duff surveys and rogue estate agents. But don't despair, owning your first home is also a very rewarding experience for most people and you can make the process smoother by ensuring you know all the right information. How much can I spend? How much you can spend depends on how much you borrow and that should always depend on how much you can afford. You could traditionally borrow up to three and-a-half times the main earner's income before tax, plus one times any second earner's income, or alternatively two-and-a-half times their joint incomes if this is larger. Many lenders threw out these multiples in favour o

Leasehold or freehold? If you own a house then the chances are you own the freehold, meaning that you own the property and land it is on lock, stock and barrel. However, if you own a flat chances are that you own it on a leasehold basis, (this is likely to be the case even if you have a share in the building's freehold.) Home-ownership explained: Freehold and leasehold have different implications Leasehold means that you have the right to occupy a property a property for a set period of time (the length of the lease), but do not own the building itself. The advantage of owning property freehold, or having a share in the freehold of a property is that you are either totally in control, or have a say of what happens with the building, and in the latter case any repairs or service charges. Leasehold More than 2m people own a property on a leasehold basis, where they own the right to occupy, but not the building itself. But thanks to changes made over the past decade, t

Guide sponsored by Halifax Home insurance is an everyday essential, protecting your property and the things you own in case household disaster strikes. Many people, however, simply fall into the trap of renewing policies year-in, year-out and see their policy premiums steadily climb – never benefitting from the cost savings of shopping around. We explain how to get a better and cheaper home insurance deal but still make sure you have the cover you need. Play it safe: Home insurance helps protect your property and contents in case disaster strikes Contents vs buildings insurance Contents and buildings insurance can be held separately or together and just as it says on the tin, the policies protect your possessions and home, respectively. Buildings insurance If you own a property with a mortgage then buildings insurance is essential, as your mortgage lender will require you to hold it. In reality though, whether you have a mortgage or not you should consider it as essential. After

Landlords must now secure tenants deposits under an approved Tenancy Deposit Protection Scheme - find out what you need to know A major change to renting a home was ushered in on April 6 2007, when new rules regarding tenants' deposits were introduced. The Tenancy Deposit Protection scheme brought in extra protection for the vast majority of people renting homes in England and Wales. It aims to ensure tenants are treated fairly and make it easier for landlords and agents to settle disputes over compensation paid for damage to rented properties. What is Tenancy Deposit Protection? Money protection: how the Tenancy Protection Scheme can help you Tenancy Deposit Protection (TDP) means that landlords who collect deposits, or agents who do so on their behalf, must join a statutory scheme to ensure tenants get their deposit, or part of it back, if they have kept a property in good condition. Disputes over how much should be returned will be mediated by an independent dis

Deciding on whether to take out a fixed rate or tracker loan can be tricky. And, with Bank of England base rates at rock-bottom, borrowers will need to carefully consider their options before locking into a decision - although tracker mortgages may seem like a good option right now, a sudden, steep, rise in rates could see your interest payments shoot up without warning. How do mortgages work? Decision making: should you go for a tracker or fixed rate mortgage? The most popular, and generally best value-for-money, deals offered by lenders are those that include an initial special rate - either fixed or variable - for a set period, typically between two and five years. After this initial deal period has ended,  borrowers will then pay back their mortgage at the lender's standard variable rate, which was once around 2 per cent above the bank rate. However, the banking crisis and subsequent slashing of the base rate down to 0.5 per cent changed things. Now SVRs range f

When you're buying a new house, it's all too easy to get seduced by the look and feel of the place  - and ignore the 'shabby-chic' brickwork or gurgling sounds coming from the boiler. But new research by the Royal Institution of Chartered Surveyors (RICS) has revealed the shocking truth: Many buyers are unknowingly setting themselves up for an average £5,750 in repair bills on their new home, thanks to whole range of hidden problems such as structural defects, rot and subsidence. As Peter Bolton King, of RICS, points out: 'A general lack of understanding about the home buying process is putting many at increased risk because they are not taking out independent, expert advice. 'Agents can and should offer advice to buyers, however, only a surveyor is trained to identify issues with a property.' Be prepared: Is your new home a ticking timebomb? Young and first-time buyers are most at risk - and, even though many stretch their finances to breaking po