the five things you need to know about stamp duty

Linda J. Dodson

Second homes

The additional 3 percentage point surcharge will still apply for second homes and investment properties.

Even if you are just moving to a new home this surcharge can be charged with a window of six years. For example, if you cannot sell you current home but buy a new home with separate funds you will have to pay the 3 percentage point surcharge. This can be recovered provided you sell you old home within three years but you must remember to claim within twelve months.

As long as you are moving to your new main home as are selling, or will sell, your current main home you should not pay, even if you have a holiday home or buy-to-let property.

However, if you sell your current home to spend time overseas or rent while owning an investment property, you will only have three years from the sale to complete on your new home without paying the surcharge.

You will not pay the additional 3pc on a buy-to-let if you do not own another property. Unfortunately, however, if you subsequently buy a home the extra 3pc will apply on that second purchase.

Gifts and ‘granny flats’

If you are buying two or more properties there is a handy tax saving trick. As long as the transactions are linked, such as an acquisition of two properties from the same seller, multiple dwellings relief can save tax.

This claim effectively averages out the cost of the two properties and charges SDLT accordingly. This is however subject to a minimum 1pc rate.

SDLT does not usually apply on gifts but if there is a mortgage of other debt transferred with the property this amount will be treated as sale consideration for SDLT. This rule also applies on a gift to your spouse or civil partner, the only exception being in a divorce.

When the 3pc surcharge was first introduced there was concern about “granny flats”. The good news is that a granny annex will not be treated as  a separate property for the SDLT surcharge as long as the value is less than one third of the total. 

Source Article

Next Post

at barely 12 times earnings, risk-tolerant investors could get a bargain with Anexo

A good portion of that dip relates to investment for future growth and a larger workforce, while a lot of the company’s customers are key workers, who are keeping going. Credit volumes are recovering quickly and the number of hire vehicles on the road in August exceeded forecasts. Meanwhile, Anexo raised […]