Don't get caught out by the change in SDLT rules that are about to come in.
Recent years have seen a significant increase in the purchase of property by individuals in order to rent out as a means of maximising income on savings in the current climate of low interest rates and returns on savings. A number of private landlords who have purchased residential properties will have paid stamp duty land tax at the current rates whereby stamp duty land tax [SDLT] is chargeable according to the portion of the value of the property falling in each band namely:
- £0-125,000 @ 0%,
- £125,000-250,000 @ 3%,
- £250,000-925,000 @ 5%,
- £925,000-£1,500,000 @ 10% and
- £1,500,000+ @ 12%
Parties purchasing a second property whether as a second home or as a buy to let property from 1st April 2016 will be charged SDLT at a 3% higher rate across all the current SDLT bands, from 3% from £0-125,000 to 15% from £1,500,000+.
This will lead to a significant extra expense to anyone currently buying a property or thinking of doing so from 1st April as a purchase takes time from initial instructions to completion. In either case time is now extremely short to complete a purchase and you should obtain detailed advice without delay to avoid paying unnecessary tax to HMRC!
Furthermore the Chancellor has pledged to continue in taking “bold action” in the area of home ownership and further measures on Stamp Duty Land Tax may be forthcoming.
Our Residential Property Solicitor Andrew Southwell is happy to assist you with your stamp duty land tax requirements as well as all other aspects of residential property.
Our Commercial Property Partner Martyn Cremin is happy to provide expert advice on all commercial property matters.