Stamp Duty – probably the most intimidating term in Real Estate after “Mortgage”. Every homebuyer has to pay a Stamp Duty Tax each time a property is transacted.
“Another tax!?” you might ask. We get it, there’s so much paperwork, fees and legal mumbo jumbo involved in purchasing or selling a home that you may be a bit reluctant to follow through. Fortunately, your agent and lawyer ensure that you are kept updated and that all deadlines, fee amounts etc. are brought to your attention in advance, and that these payments are made on your behalf!
So what exactly is the Stamp Duty Tax and why do we have to pay it?
Stamp Duty is a property transaction tax that is payable to the government once the deal is made. This type of tax is believed to have originated in the Netherlands in 1624; then subsequently introduced to the UK in 1694 and is the oldest tax collected by the Inland Revenue. Sound familiar?
Some parts of our economy originate from when Trinidad and Tobago was still a British Colony.
Stamp Duty is something every one of our clients worry about at some point in time. So we’ll now answer the question burning in your mind:
“How much do I have to pay?”
The short answer – it depends on the value that the property is being bought for. The rates have now changed due to the presenting of the 2020 national budget. We’ve compiled them here for your convenience:
FOR THE SALE / DISPOSAL OF RESIDENTIAL PROPERTY (Including dwelling house)
For homes that have a value greater than $1,500,000 TTD:
- 3% on the first $400,000 (or any part thereof)
- 5% on the subsequent $500,000 (or any part thereof)
- 5% on every dollar thereafter.
Homes under $1.5M are exempt from stamp duty.
FOR THE SALE / DISPOSAL OF LAND ONLY
For residential land with a value greater than $450,000 TTD:
- 2% on the first $200,000 (or any part thereof)
- 5% on the subsequent $200,000 (or any part thereof)
- 7% on every dollar thereafter.
Land under $450k are exempt from stamp duty. See official documentation.
This calculation can help you to gauge how much money you need to spend in order to finally turn that key in your new home.
Stamp Duty is only one of the necessary payments needed to facilitate a successful sale. When buying a home, some of the other necessary payments involved are:
- Broker / Real Estate Agent Commission (usually 3%)
- Lawyer fee
- Bank fees – if you’re getting a mortgage
Want to know more to help you make the right decision?
Our Real Estate team is standing by to help you with all of your Real Estate needs (Buying – Selling – Renting).
Click here to speak with an agent or contact our office at +1 (868) 628-9307.
We look forward to being of service to you!