Purchasing a home? Fixtures could affect stamp duty bracket

Year Published: 2012

Fitted wardrobes will be classed as ‘fixtures’ and part of the sale price for a property when you come to buy a house, according to a recent HMRC case. Take heed, as this can make a significant difference to the amount of stamp duty that you may have to pay.

Fixtures are items that are attached to the property as they are screwed down. There is a legal difference between items that can be easily moved and those that are fixed. Stamp duty is the legal tax payable when you buy a property over the threshold of £125,000. There are different rates ranging from 1% to 7% dependant upon the price.

The revenue recently successfully argued that £800 attributed to fitted cupboards could not be treated as a separate payment for items of furniture, and this led to the buyer having to pay up Stamp duty based on a higher rate band. It made a difference to the buyer of over £5,000.

With the move to modern fitted furniture, especially wardrobes and bedroom and office suites it could be a risk to ask the seller to negotiate for them separately, especially with a view to attempt to reduce stamp duty.

You should never be casual when negotiating ‘chattels’ – the legal term for items that are removable – as the revenue has the power to challenge on the grounds of tax evasion.

For advice on any property matter, contact a member of our Residential Property team on 0161 475 7676.

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