Stamp Duty Land Tax can be a significant expense when buying a property. At VWV, we paid £14,000,000 of it to HMRC on behalf of clients last year.

Stamp Duty Land Tax is also very complex. Being aware of the traps to avoid and the reliefs available could save you paying more tax that needs to be. So what should you look out for?

• If a house has a separate granny annex, then tax at a lower rate could be levied.

• If you are a first time buyer purchasing with a friend or partner who already has an interest in a residential property, then an additional three per cent on the whole purchase price is payable.

• If a mix of property is being purchased (for example a business with a residential flat above), then non-residential rates apply to the whole purchase price. This could lead to a substantial saving.

• If a residential house cannot reasonably be described as habitable, then it is not treated as 'residential' and a lower tax rate could apply.

• If you purchase your new main residence before selling your existing one, an additional three per cent is payable. You can claim a refund is you sell your old residence within the next three years.

• If a company owns a residential dwelling worth more than £500,000, then an annual tax is payable, known as Enveloped Dwellings Tax.

However, various reliefs are available, for example if the property is let to a third party on a commercial basis and isn't, at any time, occupied (or available for occupation) by anyone connected with the owner. Holiday homes could easily be caught by this.

The above is just a short summary of what are complex rules. It is important to seek legal advice if any of the above might apply.

  • David Marsden is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford