Do You Pay Stamp Duty When Buying A Park Home (mobile Home)?

There are a number things you need to keep in mind when buying a park home (mobile home).  You will be considering the location, size, plot and manufacturer of the park home.  Of all the buying factors, purchase price of the park home is usually the most important. In this article we will answer a common question when purchasing a park home ‘Is there stamp duty on park homes?’. We will also look at what stamp duty is, thresholds and the use of solicitors

Whenever you buy a park home, you are obviously going to pay attention to rules, regulations and laws.  Not just those set by park owners, of course, but those set by the government and lawmakers!  Therefore, make sure to read on for the full lowdown.  As buying a park home is such a major investment, it’s crucial you understand exactly what you’re getting into.

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What is Stamp Duty?

If you already own property elsewhere, you may have come across stamp duty before.  However, it is always a good idea to refresh your knowledge!  This duty is a type of tax that applies to various property owners up and down the UK.  Individuals, businesses, sole traders and more will have to pay this duty depending on the type of property they own.  Of course, it’s worth remembering that this will apply to UK properties only.

The duty is also known as Stamp Duty Land Tax, or SDLT.  This is a tax that you pay when you buy a property over a certain price that has been decided by the government .  However, some buildings are exempt from the tax.  The duty calculates according to both the value of the property in question, as well as its primary use.  For example, you may pay different rates if you use a building to run a business.

Read our article on PARK HOME SURVEYS.

Is There a Stamp Duty Threshold?

Yes, for both residential and commercial properties.  This can change depending on government budget alterations, but providing your property falls below the threshold, you won’t need to pay any extra tax.  As this may change from the time of writing, we recommend that you take a look at the government’s advice to check what the current threshold is, and whether or not it affects you.

Crucially, anyone who buys a property with land over a certain value will need to pay SDLT on top. This is unless the property is exempt from the duty. 

Using a Solicitor

If you do need to pay stamp duty, you should always seek help from a solicitor.  This is because SDLT returns can get quite complex. If you have never had to fill a return of any kind before, it’s important you make sure someone can help you in a legal capacity.  In many cases, a solicitor might be able to do all the paperwork for you.  That might be a massive relief!

It is never a good idea to try and handle SDLT on your own.  Tax can get very complex at this level, which of course means you could end up paying much more than you have to if you make a mistake.  Is it really worth being out of pocket?  It makes sense to be safe rather than sorry!  It is never worth gambling on property.  Make sure you know exactly what to pay and when.

See our RECOMMENDED PARK HOME SOLICITORS.

Are There Stamp Duty Exemptions?

Yes – in some cases, you won’t have to pay anything through SDLT.  However, this is something you may do best reading up on through the government’s own guides and advice. Take a close look at what GOV.UK has to say before you budget or make any payments.  You’ll find a list of stamp duty tax reliefs and exemptions here.

Do I Have to Pay Stamp Duty on a Park Home?

No, stamp duty is not payable on park homes. Park homes are also known as mobile homes because they have no fixed grounding, and those who buy these properties have no rights over the land they are on.

Stamp duty, or SDLT, will apply to property owners who buy land found via the UK Land Registry.  This means that if your property is not on their list, the duty won’t apply to you.  This will generally mean those people who buy and own bricks-and-mortar properties will have to fill out returns.  This will likely be a huge relief to potential park home buyers!

This is one of many reasons why people choose to buy park homes over traditional properties.  Not only are they more affordable from the get-go, owners generally have less tax and duties to pay.  Think about how much time and money you will save not having to enlist a solicitor, and not having to fill out and pay for a full return! 

Read our article; 10 GOOD REASONS TO BUY A MOBILE HOME.

What is ‘Leasing the Land’?

When you buy a park home, most of the time, you will be leasing land.  This means that, instead of buying land, you will rent it from a park site owner.  Therefore, they are normally responsible for any specific duties.  Often, you’ll find the price of leasing land or a pitch is part of the pitch fees you clear with park owners each year.  They should itemise this to you, so you know what you’re paying.

Land leasing does also have its drawbacks.  It means that park homeowners can’t secure mortgages against their properties.  However, they can look for alternative finance options if they wish.  Land leasing helps to make things more attractive to people who don’t want the hassle of SDLT.  However, it can also take away a few benefits.

Read our article on WHY YOU SHOULD PART EXCHANGE TO A PARK HOME.

What Are the Exceptions to Stamp Duty and Park Homes?

In very rare and specific circumstances, stamp duty can apply to park homes.  The government has thankfully made these circumstances very clear in a document you can download and read from their website at GOV.UK.  Click here to access SDLTM10023, a document which covers mobile homes, caravans and houseboats and SDLT.

Essentially, if there is any chance that the property you are buying is park of Land Registry occupation, you’ll need to pay stamp duty.  The rules surrounding this can get a little foggy, so it may be worth discussing such issues with your park owners and a solicitor.  Again, we never recommend you tackle tax or any legal issues on your own.  In fact, we always advise you to enlist the help of a solicitor even when you sign a park agreement.  Therefore, again, it is better to be safe than sorry!

However, there is no need for you to panic.  SDLT, in the huge majority of cases, will never apply to park homes.  It is worth reading through the document through the link above, however, before you consider buying a park home or any similar property.  You really aren’t likely to find SDLT to be a concern.  A solicitor, however, will help to put your mind at ease, so do make sure to set up a consultation if you are worrying.

Read our article on PARK HOME FINANCE.

Conclusion

To conclude, there is no stamp duty on park homes.  Therefore, that’s going to be a huge relief to anyone who will be buying property and budgeting.  However, it’s always going to be a good idea to read through official documents and to discuss any concerns you may have with a legal advisor.  Otherwise, you could end up signing something you really don’t feel comfortable with.

Do make sure to visit the GOV.UK website directly for more information on stamp duty and other taxes.  You should also download HMRC’s free SDLT manual, which should break things down even further.  Otherwise, talk to your park owner or operator – and they will point you in the right direction!

Read our article ‘DO YOU NEED AN EPC WHEN BUYING A PARK HOME‘.