FAQS about Property Tax.

Posted on 9 January 2020

First of all, what is property tax you may wonder? Well, property tax is the yearly amount paid by the owner of the land to the local government. They have to pay ‘property tax’ on all the tangible estates they have in the area that they own, even if the building has been rented.

The tax amount due really depends on how many properties there is in the area. So if you have a small amount of properties you may have to pay less property tax but you may be losing money as you don’t have as much income coming in.

Property Taxes are due on the same dates every year, which is May 15th and October 15th. However, if this day falls on a weekend or a bank holiday then it will be due the next working day. Recently they have added that you can pay online which is a lot more convenient for most property owners.

Most Frequently Asked Questions about Tax:

Q:What is Property Tax?

A: Property tax isn’t just one tax, there a number of taxes on property business and landlords. These include, stamp duty land tax on purchase, income or corporation tax on rental profits,  capital gains tax on the growth in value of a property, inheritance tax on the death estate of an individual, council tax and VAT (for commercial properties)

There are also different rules for non-residents who are taxed under the non-resident landlord regime- please note that the rules for some non-resident landlords changes in April 2020- Under the NRL regime, the tenant or agent may be required to deduct tax at source if they have an overseas landlord and pay this to the HMRC on a quarterly basis. There are also different rules for non-residents regarding capital gains tax which result in the tax liability being paid much earlier than under the usual self-assessment regime.

Q: What is capital gain tax?

A: Capital gains tax is a tax levied on the growth in value of certain assets

Q: Can Property tax be paid online?

A: There are various taxes applicable to property with many different ways to pay, the best option is to view HMRCs website where all accepted payment methods are set out for each tax. Many taxes do allow online payment, such as income tax

Q: Why do my taxes go up every year?

A: To pay for the increasing cost of public services

Q: I just purchased a property. Why am i being told that I am responsible for the full year’s taxes?

A: This is dependent on which tax and why, e.g. Stamp Duty Land Tax – the buyer is fully liable, council tax it may just be a mistake.

Q:What is the bracket for stamp duty?

A: Current Brackets:

Buy to let and second home stamp duty tax bands

Brackets                                                             Standard Rate                                  Buy-to let/second home rate (April 2016)

Up to £125,000                                                 0%                                                                          3%

£125,001-£250,000                                         2%                                                                          5%

£250,001-£925,000                                        5%                                                                          8%

£925,001-£1.5m                                               10%                                                                        13%

Over £1.5m                                                        12%                                                                        15%

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