Buying real estate in the UK can be an attractive option for both local and foreign investors. However, one of the most important issues to be considered in this process is the taxes to be paid in the purchase of real estate. We will inform you about this issue below:

SDLT – property purchase tax: It is one of the most important taxes paid when buying real estate in the UK. This tax varies depending on the value of the property purchased and the type of property. Generally applies to property purchases above a certain threshold.

• 0-250,000 Pounds: 0%
• 250,001 Pounds-925,000 Pounds: 5%
• 925,001 Pounds-1,500,000 Pounds: 10%
• 1,500,001 Pounds and above: 12

Second homes and investment properties: if you are buying a second home or investment property, you may have to pay an additional 3% surcharge. However, second home buyers do not pay this tax on properties up to £425,000.

Value added tax: VAT: VAT is generally not payable on residential property purchases, but you may have to pay VAT at a rate of 20% on commercial or new-build properties. This may vary depending on the type of property and the terms of sale.

Annual property tax: once the property has been purchased, the COUNCIL TAX, which is a property tax payable each year, is set by the local government and varies according to the area in which the property is located, the value of the property and its intended use.

Income tax: If you earn income by renting out the purchased property, income tax must be paid on this income. Income tax rates in the UK vary depending on the amount of income and range from 20% to 45%.

Capital Gains Tax: If the property is subsequently sold and a profit is made on the sale, capital gains tax is payable on the profit. This tax depends on your tax bracket and the type of property. The basic rate is 18% for taxpayers and 28% for higher rate taxpayers.