How Taxes on Selling a House Affects Homeowners
Selling your home isn’t without expenditure – especially when opting to list your property with a local, high-street estate agent. Homeowners must pay stamp duty upon selling the property, agency fees – if opting for a high-street estate agent, or even renovations and decorating costs to make their home more marketable. But, what about the taxes on selling a house?
The UK government doesn’t charge residents taxes on selling a house. However, this area of taxation law is quite complicated, and vendors can quite easily end up paying taxes on selling a house they didn’t initially intend or want to.
With more than 230 properties sold each month, Springbok Properties has a comprehensive understanding of the taxes on selling a house that homeowners may have to pay – once the property has been sold.
Dispelling a few myths and providing clear and concise information about everything homeowners should be aware of about the taxes on selling a house, Springbok Properties will guide you through the complex world of UK property taxation law.
Selling Your Home Isn’t ‘Tax Exempt’ Affects Taxes on Selling a House
Homeowners in the UK are afforded relief from taxes on selling their home, if certain conditions are met. This is called ‘Private Residence Relief.’
Homeowners that choose to sell their home must pay Capital Gains Tax (CGT) on any gain your home has made. However, homeowners are entitled to full relief of capital gains taxes on selling a house if they qualify for the following:
- The house is your only or primary residence throughout the period of ownership
- You have lived in job-related accommodation during the period of ownership
- Any garden or grounds (including buildings such as outhouses) are not greater than the permitted are
- You house has not been used exclusively for business purposes during the period of ownership
With more than 80 property experts, including conveyancers, Springbok Properties can advise homeowners in all areas of Capital Gains taxes on selling a house. Call us TODAY on: 0800 068 7935, and one of our award-winning customer service team would be happy to help.
Your Reason for Initially Buying the Property Affects Taxes on Selling a House
The reason for buying the propertyin the first place will affect homeowner taxes on selling their home. Section 223 of the Taxation of Chargeable Gain Act 1992 does not apply in relation to the gain, IF the acquisition was made wholly or partly for realising a gain from the sale of the property.
In relation to taxes on selling a house, Section 223 goes on to state that (taxes on selling a house) shall not apply in relation to a gain so far as it is attributable to any expenditure incurred at the beginning of the period of ownership, whether wholly or partly for realising a gain from the sale of the property.
So, any taxes on selling a house are not applicable, and HMRC will issue homeowners with a Private Residence Relief on the sale of the property. This has allowed property investors to make a good living buying and selling property across the UK and abroad.
To discover if you’re entitled to a Private Residence Relief from taxes on selling a house, and how Springbok Properties can assist you, call us TODAY on: 0800 068 7935.
Taxes on Selling a House as Your Secondary Property
Homeowners who have rented their property to private tenants whilst living in another property can also be affected by taxes on selling a house.
If you’ve rented your property during a period of ownership, some gain might be taxable. However, restricted relief from taxes on selling a house can also be claimed. The conditions are that the relief relating to the period of rentals is the lesser of the following:
- The proportion of the gain (calculated monthly) relating to length of letting period
- The proportion of the gain relating to the general main residence relief
- Or £40,000
If, for example, you’ve owned a property for 10 years and made a £120,000 gain, then a £1000 gain will be made on taxes on selling a house. However, if the property was rented to tenants for 4 years, the gain related to the let period would be £48,000 (48 months at £1000.)
We realise that the taxes on selling a house is quite a complex subject. Homeowners shouldn’t be expected to understand every aspect of the taxes on selling a house. Springbok Properties has a wealth of experience, not only selling homes for up 99% market value in as little as 7 days but, have a team of professional property experts able to answer any questions you may have about taxes on selling a house.
Call our award-winning customer service team TODAY on: 0800 068 7935 and we’ll be happy to provide you with comprehensive guidance on all aspects of taxes on selling a house.