Stamp Duty


What you need to know about stamp duty on buy-to-let and second homes

Second home buyers and buy-to-let landlords must pay extra stamp duty since a three per cent surcharge was introduced by the Government in 2016.   The charge applies to buy-to-lets, second homes and even properties bought with other family members.  The charge also applies to company purchases.

As an example a £175,000.00 second home bought before April 2016 attracted stamp duty of £1,000.00 being 2% of the portion exceeding £125,000.00.  Since April 2016 the same purchaser has had to pay 3% for the first £125,000.00 and 5% (instead of the previous 2%) on the excess giving a total bill of £4,000.00.

Anyone owning a second property which is not their main residence and buying another, or replacing the one they do not live in, is likely to be caught.   Homes owned by either partner will be included so that an individual buying a property will be liable to pay the higher rate should their partner or spouse have an existing residential property.

Parents keen to help their children on to the property ladder are also likely to incur extra stamp duty if they buy in the name of the parents or in their joint names of the parent and child.    Property owned overseas is also considered relevant as this can be taken into consideration when determining whether the property purchased is a second property and liable for the higher rate of stamp duty land tax.

As might be expected there are exemptions for social landlords and charities and transactions under £40,000.00 do not require a stamp duty land tax return and are not subject to higher rates of tax.

If you are looking to buy or sell a property, or have questions relating to the Stamp Duty Payments,  then get in touch with our specialist property team today. Declan Hayes, head of property, can be contacted on 01756 692888.

17 September 2018