Stamp Duty Land Tax will rise by 3% from April 2016 on a home you buy that is not your main residence. Exemptions from this will be homes sold for under £40,000 and also include caravans, houseboats and mobile homes. Therefore, if you are intending to buy a second home, now is the time to act to ensure completion takes place on or before 31st March.
To clarify, the new rates will be:
|Stamp Duty on Main Residence||Stamp Duty on Additional Home|
|£1 – £125,000||0||3%|
|£125,000 – £250,000||2%||5%|
|£250,000 – £925,000||5%||8%|
|£925,000 – £1,5000,000||10%||13%|
This second SDLT rate will apply to a house which you buy but do not immediately live in as your main residence such as a buy-to-let property including furnished holiday lets or a holiday home. If you buy a house as your main residence but cannot sell your previous home at the same time, this additional tax will be charged. However, as long as you sell the original residence within 18 months, the extra tax will be refunded.
No concession is planned for those who buy a second home for work; for example those who live in the country but buy a flat in town to stay in whilst working.
Final details of the changes will be announced on Budget Day (March 16th 2016) following a consultation which ends on 1st February.
Examples of how the changes will effect the amount you pay in SDLT on second homes from 1st April are listed below:
|Price of Property||Stamp Duty 1st||Stamp Duty 2nd||Difference|
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