|  Stamp duty – that horrid and ancient tax that we have to pay when we buy or lease a home. What is it, how is it calculated, and what are the exemption zones? Although most home purchasers are aware of the requirement to pay stamp duty, many are still unaware of the stamp duty exemption zones and money they could save when buying a house in them. Available since November 2001 these money-saving exemptions have sometimes been neglected by purchasers and their solicitors alike. 
Stamp duty is a tax payable to the Inland Revenue on the conveyance of a property. It is calculated against the sale price on a sliding scale. Traditionally the duty relates to the sale document, not the property. Although the existence of a form of stamp duty can be traced back to Roman times, most historians agree that in its current form it originated in the Netherlands in 1624. This was as the result of a competition to find a new form of tax. There is no record of the inventor’s name but the winning idea required that certain legal documents be written on stamped paper. Stamp duty was first introduced into this country in 1694 during the reign of William and Mary to help pay for the war against France. The duty was on the vellum, parchment and paper used to draw up the contracts. The duties proved so successful that they were continued. In 1765 the attempted imposition of stamp duties in America was met with opposition throughout the colonies. Protest meetings were held and the outcry of ‘no taxation without representation’ was raised. The arrival of ships bearing consignments of stamped papers was attended by major rioting - the best known being the Boston Tea Party. In 1808 stamp duty was first imposed on conveyances on sale. At the same time duties in England and Scotland were made equal. Today stamp duty is payable by the purchaser of most freehold properties and land over a certain price, currently £60,000. Duty is payable on leasehold too but the rules are slightly different, the duty being split between rent and premium. 
Normally, stamp duty is payable if the price of the house you are buying is more than £60,000. This covers a wide range of properties and as house prices have increased so far, there has been much talk about the penalties it causes first time buyers in particular. Since Nov 2001 the government has declared some disadvantaged areas of Britain ‘exemption zones’ where stamp duty is not payable, though some people have not realised how many of these zones there are. If your new home is in one of these areas you could be able to avoid paying stamp duty on the conveyance, saving yourself a minimum of £600, so it’s definitely worth checking out. Stamp duty is payable on a purchase price of less than £60,000 only if the sale is part of a larger transaction or series of transactions. This is uncommon in most house sales and purchases. The normal 'chain' of buyers and sellers is not regarded as a series of transactions for this purpose. Stamp duty is payable on the full sale price of the house whether or not the purchase is by one person or jointly with others. Also the amount of mortgage makes no difference, the duty is on the declared value of the property.
 If you buy a house at a price over £60,000 but not exceeding £250,000 duty is charged at 1%. For amounts over £250,000 but not more than £500,000 the rate is 3% and if the purchase price is more than £500,000 the rate is 4%. The amount of duty you pay will depend upon the amount of the purchase price and whether the appropriate certificate of value is included in. If your document does not contain the appropriate certificate, duty becomes payable at the higher rate of 4%, regardless of the amount of the purchase price. The purchaser’s solicitor will normally deal with the collection and payment of the duty to the Inland Revenue via one of several Stamp Offices. 
Since 30th November 2001, stamp duty exemption has been available for the purchase of residential property in certain designated disadvantaged areas of the UK, and where the purchase price does not exceed £150,000. The exemption applies to all conveyances and transfers of land or an interest in land, and to all leases of an interest in land, executed on or after 30 November 2001, where the land falls wholly or partly within one of the disadvantaged areas. The European Union approved the chancellor’s plan to exempt commercial property sales in disadvantaged areas from stamp duty in January of this year. The purchaser’s solicitor will normally deal with the exemption paperwork in the same way as he/she would deal with payment of duty to the Inland Revenue. However, if you suspect that you are buying in an exempt area you should advise your solicitor of this fact. The list of areas is surprisingly large and covers areas one might not expect to be ‘disadvantaged.’ This may go some way to explaining why the take-up has been low. A full list may be seen at the following sites: To view these documents you need to use a PDF file viewer such as Adobe Acrobat Reader. If you don't have a copy of Acrobat on your computer you can get a free copy at Adobe
If you wish to identify whether a particular area is designated ‘disadvantaged’ and you know the postcode you can check at www.inlandrevenue.gov.uk/so/pcode_search.htm However beware, an estimated 8,000 new postcodes are generated in the UK every year so it’s likely that the websites won’t be completely up-to-date. Some solicitors relying upon the revenue website have been erroneously informing clients that they must pay the charge, the BBC reported recently. The best way to check for sure is to use the helpline 0845 603 0135 Details for this article were taken from the Inland Revenue website, which can be found at www.inlandrevenue.gov.uk | 
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