The new Stamp Duty rates for second homes are due to come to force on 1st April 2016, as a result, some buy-to-let investors are keen to invest before the changes come into effect. In fact, Rightmove has reported its busiest month ever for traffic.
The figures at a glance…
There will be an additional charge of 3% applied on top of the current stamp duty land tax rates:
- 3% tax to pay on homes worth up to £125,000
- 5% tax on homes that cost between £125,001 and £250,000
- 8% on homes worth between £250,001 and £925,000
- 13% on homes worth up to £1.5 million
- 15% charge on properties priced above £1.5 million
A few things to note:
- If you exchanged contracts before the Autumn Statement on November 25th 2015, the higher tax rate won’t apply, even if completion is after the 1st April.
- As a parent, you can still be a guarantor for a loan, but a joint mortgage that requires your a parent’s name on the title deed will be hit by the tax.
- Couples who want to buy a property each will be taxed, married couples and civil partners will be treated as a single unit and any additional property purchased by either person will attract the higher rates.
- Do not rush into anything. If you are looking to avoid the new taxes, make sure that the 3% saving is not outweighed by temporary rises to property prices as a result of the rush.
For more details, please contact us on 020 8740 6622.