How to Avoid or Reduce Stamp Duty
20th March 2025Did you know that there are some legal ways on how to avoid stamp duty or lower how much you owe? Here at Jon Simon Estate Agents Burnley, Radcliffe, Ramsbottom, and Bacup we have been successfully selling and managing properties ever since 2008, so we know a thing or two about stamp duty!
In this blog you can find out how to avoid stamp duty legally, helping you to save cash that can be spent better elsewhere. Carry on reading to discover more about how to avoid stamp duty and how to avoid stamp duty on second home properties in the UK.
What is stamp duty?
Stamp duty is a tax that is paid if you purchase a property or land over a specific price. How much you pay depends on whether the property or land will be residential or non-residential. It also depends on whether you are eligible for relief or an exemption. For example, there are different rates of stamp duty if you are a first time buyer or if you already own a property.
You pay stamp duty when you:
- purchase a new or existing leasehold
- purchase a freehold property
- purchase a property through a shared ownership scheme
- are transferred a property or land in exchange for payment
From 1 April 2025 the threshold will be £125,000 for residential properties, or £300,000 for first time buyers if the property is worth £500,000 or less. For non-residential properties, the threshold is £150,000.
How to avoid stamp duty
Haggle on price
Have you seen some houses for sale Ramsbottom or houses for sale Bacup that take your fancy? Have you tried to negotiate on the price with the seller? It’s always wise to try and haggle on price regardless. Negotiating a lower price can also lower your stamp duty, as the amount of tax you pay is based on the cost of the property.
Separate the costs
If the seller has included extra costs in the overall purchase price, for example for new appliances or fixtures, this will increase the amount of stamp duty tax you pay. You should keep these costs separate so that the house price is just for the house, and not for the features inside of it.
Build your own home
This isn’t exactly a loophole and is likely to be an option that many people cannot afford, in terms of both time and finances. If you do have the ability to build your own home, you only pay the stamp duty land tax and you do not have to pay the stamp duty tax on this and the property value combined.
Transfer the property
Avoiding stamp duty becomes a lot easier if a property is given to you as a gift or in a will. But this does depend on whether the property has been transferred to you with or without a mortgage. If it does have a mortgage, and you take on the duty for some or all of it, then you will still likely be liable to some stamp duty.
Buy out your partner
If you’re married or in a partnership you may be able to buy out your partner’s part of the property without needing to pay added tax.
How to avoid stamp duty on second home
How to avoid stamp duty on second home properties is a little different. If you’re buying a second home you will typically need to pay an additional 5% stamp duty surcharge on top of the standard rates. However, there are several ways to reduce or avoid this extra cost.
- Sell your first property first: If you buy a second home before selling your current one, you’ll have to pay a higher rate of stamp duty. However, if you sell your first property within three years, you can apply for a refund of the extra stamp duty you paid.
- Purchase via a company: If you are buying a second home as a buy-to-let investment, buying the property through a limited company can help with tax efficiency. The 5% surcharge will still apply, but you may be able to benefit from corporation tax deductions that could help offset some costs.
- Transfer ownership to a spouse or partner: If you already own a property but your partner does not, you could consider buying the second property under your partner’s name. This strategy works best for couples where one person is a first time buyer.
- Consider moving in: Have you thought about moving into your second home? If you plan to make it your main residence, it may not count as a second home for tax purposes. Of course, you must genuinely live in the home for it to be considered your primary residence.
- Buy a property under the threshold: Stamp duty only applies to properties over £40,000 when buying a second home. If you can find a property below this price you may be able to avoid the extra tax, although this may be rare.
More information on how to avoid stamp duty from Jon Simon
Our independent team of property experts and valuers here at Jon Simon Estate Agents are all highly specialised with an unrivalled understanding of the market in the areas they work in. This includes houses for sale and houses to rent Radcliffe, Ramsbottom, Bury, Bacup, and many more areas in the local region.
If you would like some more information on how to avoid stamp duty then please do not hesitate to get in contact with us. Alternatively, you can send an email to info@jonsimon.co.uk and one of our representatives will get back in touch with you as soon as they can.
We also have offices in Burnley, Radcliffe, Ramsbottom, and Bacup if you would prefer to come and talk to us face to face. We are more than happy to have a chat and help you with your new house purchase.
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