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Updates from the Clayton & Brewill team.
New stamp duty rates from today, 1 April
The new rate of stamp duty on second homes and buy-to-let properties is now in force as of today, Friday 1 April 2016, as Clayton & Brewill explain.
Unless you are purchasing a property for less than £40,000, you will be liable to pay an extra 3% in stamp duty. The stamp duty hike was first announced by George Osborne in the Autumn Statement and will affect both buy-to-let landlords and investors, and anyone buying a second home.
The new rates of stamp duty will have a substantial impact on the cost of buying a second home or buy-to-let property, for example – the duty on a property costing £200,000 has risen from £1,500 to £7,500.
How do you define a ‘second home’?
A second home is essentially anything other than your main residence – it could be a holiday cottage, a property bought as an investment or helping another family member to get onto the property ladder.
If you are buying a property for a child or grandchild and you are named on the deeds then you will be counted as a second home owner and charged the additional stamp duty. Helping out with a gift of a deposit will not be a problem – only part-owning the property.
What about accidental second home ownership?
If you are moving house and buy your next property before selling the one you are living in, you will ultimately be exempt from paying the extra 3% stamp duty charge. Unfortuantely however you will have to budget for paying the stamp duty at the time of the purchase; you then have three years to sell the property and claim back the extra stamp duty from HMRC.
New rates of stamp duty at a glance
