After the new Labour Party government Budget, Chancellor Rachel Reeves has confirmed state pensioners and older people face stamp duty hikes.

State pensioners 'exempt' from stamp duty increase thanks to loophole

by · Birmingham Live

State pensioners can avoid a stamp duty hike thanks to a little-known loophole: buying a park home. After the new Labour Party government Budget, Chancellor Rachel Reeves has confirmed state pensioners and older people face stamp duty hikes.

Unlike when purchasing a traditional home, stamp duty is not required when purchasing a park home. This is due to the fact that stamp duty is a tax on the land being bought, but when you buy a park home. You are not actually purchasing the land on which the home sits – instead, you get the right to stay on the plot in perpetuity.

Stamp duty is levied on the purchase of residential or commercial property or land in the UK. When you buy a holiday home, static caravan, or similar property, you are simply acquiring the property itself, not the land it sits on, under government guidance.

READ MORE UK faces -5C snow with 'three regions in England' set to be hammered

As a result, stamp duty is not (usually!) applicable. There is no stamp duty on the acquisition of a vacation home, lodge, mobile home, or caravan. Most of the time, you’re buying the property, not the ground on which it sits, the guidance goes on to add.

Although estate agency fee has to be paid, park homes are often exempt from stamp duty. Park homes can also be acquired without the need of a solicitor, but this is recommended when purchasing a pre-owned home, under current rules.

Sales & Marketing Director at Regency Living, Tim Simmons said: “Homebuyers across the nation will be understandably disappointed to see that no extension to current stamp duty relief thresholds was granted in this week’s Autumn Statement.

“The good news is that, for first-time buyers, purchasing a home at £300,000 or less will still see them pay no stamp duty, however, it’s existing homebuyers who are likely to be hit with the largest increase in costs when it comes to purchasing.

“For many, this increase will be £2,500 and will see the average existing homebuyer across England paying £5,500 in stamp duty. However, this climbs north of £10,000 in 55 local authorities and as high as £58,000 in the most expensive areas of the market.

“Whilst having a foot on the ladder does put them at an advantage to some extent, stamp duty remains a substantial financial barrier that delays homebuyers at all rungs of the ladder. It’s hardly surprising that one of the biggest draws of the residential park home sector is the fact that park home buyers don’t pay any stamp duty on their purchase. So not only do the majority benefit from releasing equity in their bricks and mortar home, but they also face lower costs when purchasing, putting them in a great position financially.”