When investing in property Stamp Duty is a huge amount of extra cash as you can be paying an Extra 5% down on the property price just to enter the investment.

As a non-investor there are ways of avoiding Stamp Duty, for example as a first-time buyer, but that doesn’t help you if you are an investor.

Buy A Holiday Lodge

Buying a property which is moveable in some ways are exempt from Stamp duty. These include modular homes, Lodges, Caravans, and other movable assets. This can be partially tricky as many of these kinds of assets can depreciate, for example a caravan will likely be worth a lot less in 5 years.

At Fabrik we focus on Holiday cabins of sturdy structure that can increase in value, it is walking a thin line between what is a moveable asset, but they still qualify. In addition to this they can produce some of the biggest yields. So, if you are looking for high yield income and wanting to avoid stamp duty and want to buy cash (avoiding interest rate hikes) then these should be a serious consideration.

Buy student accommodation

A student property is classed as a non-residential dwelling, this means 2 things. Firstly, it is subject to lower SDLT rates, but this also includes the fact that if the property is under £150,000 then there is no Stamp Duty. And then it is only payable on every penny above the £150,000.

Both the above methods will be for cash buyers only, so you will need a significant cash investment for you to make. The trick is buying an investment property with a mortgage and paying no or little stamp duty.

Buy a commercial property at less than £150,000

The stamp duty tax that applies to student accommodation is also the same for commercial, as they are both classed as non-residential dwellings. So, if you buy a commercial property the first £150,000 is 0%.

However, If you buy a mixed use property this 0% rate still applies. For example, if you buy a shop with 2 flats above it then you effectively have 1 commercial unit and 2 residential properties all on this 0% or lower stamp duty rate.

Unlike buying student property you can purchase a property like this on a mortgage, meaning you do not need to invest in all cash. Using a mortgage along with no stamp duty can yield great potential for a fantastic return on cash invested.

Register as a Social Landlord

This isn't as straight forward as it sounds. But if you are setup correctly with government contracts with the purpose of supplying social housing then you can get reliefs and exceptions. This for example would apply to a council which buys properties. To work as an investment you would likely need to jump through a lot of loop holes and be setup as a housing association. Many of these would also be for non profit. However, there are groups who work on this basis and make a profit. We would highly recommend to research and gain proper advice on this from the government website and qualified professionals.

Build you own property

This can be an extreme option but is popular for builders and construction companies. You are still eligible for stamp duty on the land you purchase, but then there is no stamp duty after this, as technically you never bought the property, just the materials and labour.

If the land is less than £40,000 then as discussed in next point you will also be exempt from Stamp Duty.

Buy a property less than £40,000

If you are buying a property at less than £40,000 then stamp duty is not payable, this is for investors and homeowners. A property at this value is going to be a hard find and will likely be a 1 bed flat in need of major works.

Buy a property with 7 or less years on the Lease

Its not a wise choice to buy a property with less than 100 years remaining on the lease and 7 years is unheard of, unless you had something else lined up such as guarantee on a lease agreement of at least 100 years.

Buy a Zero carbon property

A Zero carbon property probably isn’t easy to come by and will be a real niche 1 off project. The kind of thing you only see on a news report about a couple living in the wilderness somewhere with a grass roof and an outhouse. None-the-less if you do buy a Zero Carbon property then you can become exempt from Stamp Duty.

Disclaimers: Although we endeavour to provide correct up to date information  we cannot guarantee any information on this article is accurate. Before investing you should always speak to a qualified professionals  such as solicitors, mortgage brokers and FCA regulated wealth managers.