It has received a lot of media coverage of late so most of us may already be aware of the imminent changes in respect of Stamp Duty Land Tax (SDLT) but for those who aren’t and for those who are looking to purchase property as a Buy to Let (BTL) or for those in a position to purchase a second, third or fourth home then you need to pay attention.
The changes come into effect on the 1st April 2016 and will affect BTL Investors who will have to face an additional 3% Stamp Duty surcharge. The same surcharge will also apply to anyone who owns more than one property and looking to purchase more.
For example, a property purchased for a price of £150,000.00 on the 22nd January 2016 would attract an SDLT payment of £500.00 whether it was purchased as a BTL, second home or by a First Time Buyer. However on the 1st April 2016 that £150,000.00 property will attract an SDLT payment of £5,000.00 for a BTL investor or for those who own more than one property, so it’s quite a difference!
To be clear it does not affect a purchase whereby you sell your main residence and complete the purchase of your new home at the same time but if you purchase a new property without selling your main residence e.g. the sale completes at a later date to your purchase, then you will be subject to paying the higher SDLT rate but you can claim a refund if you sell your previous main residence within 18 months.
Final details will be announced at the Budget on 16 March 2016 but higher rates will apply from 1 April 2016.
There has been much debate as to how this will affect the market and the impact will remain to be seen. If you are a BTL investor looking for a property it may still be possible to beat the hike but you need to act fast!
If you need advice then please contact Kelly Roberts for assistance on firstname.lastname@example.org or call one of our Conveyancing team.