What taxes and fees do you need to pay for British real estate?

There are five kinds of taxes and fees that British real estate needs to pay: stamp duty, value-added tax, municipal property tax, personal income tax and capital gains tax.

1. stamp duty

When buying real estate in the UK, stamp duty (SDLT) must be paid to the Inland Revenue Department before the transaction can finally be recognized by the government. According to the latest tax rate published by the British Ministry of Finance 2012,21,the specific collection standards of stamp duty are as follows:

The purchase of property with a value below 125000 (including 125000) is not subject to stamp duty; If the total property value is 12500 1-250000, the stamp duty rate is1%of the total property value; For the property with a total value of 25,0001-500,000, the stamp duty is 3% of the total property price; For the property with a total value of 500,006,5438+0-654.38+0 million, the stamp duty is 4% of the total value; If the total value of the property is more than 6,543,800+0,000 and less than 2 million, the stamp duty rate is 5% of the total value of the property; If the value of the purchased property exceeds 2 million pounds, the stamp duty is 7%; If you buy a property worth more than 2 million pounds through the company, the stamp duty rate is 15%.

2. VAT

Value-added tax refers to the tax levied on the value-added part of the goods or services provided during the operation in the UK. In the process of buying a house, almost all lawyers and accounting services need to pay VAT. Law firms that provide services will provide specific lists of fees and taxes before real estate transactions according to specific service matters.

3. Municipal Property Tax Council Tax

In Britain, all properties have to pay municipal property tax to the local government every year to pay for the local government's public service facilities, such as libraries, schools, transportation, garbage collection and sanitation facilities. According to the total price of real estate, the tax amount of municipal property tax is also different. After the real estate transaction, the buyer has the responsibility to contact the local government to obtain the amount and payment method of the municipal property tax on the purchased real estate. Usually, the municipal property tax in Britain is between 900 and 3000 pounds a year.

4. Personal income tax

According to the British tax law, both permanent residents and overseas investors are required to pay personal income tax on their real estate rental income in the UK. Usually, the landlord or intermediary agency collects the rent first, and then pays the tax due for one year at the end of the British fiscal year. According to the regulations, landlords can use legal property fees to offset some taxes. If you apply for a mortgage loan from a bank when buying a real estate, the interest paid to the bank on the mortgage loan (excluding the principal) can be deducted from part of the tax payable.

5. Capital gains tax

Capital gains tax is a tax levied on the income of capital goods such as stocks, bonds, real estate, land or land use rights when they are sold or traded. There are two tax rates of capital gains tax in Britain: 18% and 28%. The capital gains tax on real estate sales in Britain is only for investment in rental housing. The income from the sale of owner-occupied housing is not subject to capital gains tax. Capital gains tax is levied according to different standards according to personal income: if the personal income tax rate is as low as 20%, the capital gains tax rate is18%; If the personal income tax rate is 40% or above, the capital gains tax will be levied at 28%.