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Is Stamp Duty paid on purchase of a primary residence in the UK deductible as real estate or property taxes for US tax purposes?

 
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2 Replies
CathiM
New Member

Is Stamp Duty paid on purchase of a primary residence in the UK deductible as real estate or property taxes for US tax purposes?

No, but you can add the Stamp Duty to the basis of your residence.  This will decrease any gain you might have when you sell the residence. Since the Stamp Duty is only paid when you buy or transfer a property, it does not qualify as real estate or property taxes. See https://www.gov.uk/stamp-duty-land-tax for definition of Stamp Duty. 

However,your real estate taxes on your residence in the UK may be deductible. 

According to 2016 Instructions for Schedule A (Form 1040) page 6 "Line 6 Real Estate Taxes":

"Include taxes (state, local, or foreign) you paid on real estate you own that wasn't used for business, but only if the taxes are assessed uniformly at a like rate on all real property throughout the community, and the proceeds are used for general community or governmental purposes".  

The entire instructions for Schedule A can be found with this link:

https://www.irs.gov/pub/irs-pdf/i1040sca.pdf

Also, page 10 of IRS Publication 530, lists what items you can add to the basis of your home. The link is provided herehttps://www.irs.gov/pub/irs-pdf/p530.pdf

redsoxpats38
Returning Member

Is Stamp Duty paid on purchase of a primary residence in the UK deductible as real estate or property taxes for US tax purposes?

Do you add to the cost basis Stamp Duty Reserve Tax (SDRT) paid on converting UK company Ordinary Shares to ADS and selling the ADS?

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