The Governments new stamp duty levies will come into force in a littler over 3 months time. Buy-to-let landlords and second home owners will pay now pay thousands of pounds in additional taxes when they buy a property when the new "landlord" stamp duty tax comes into force.
The Government has announced that increased rates of Stamp Duty Land Tax will come into effect from 6 April 2016. Under the new rules, the rate of SDLT on the purchase of a buy to let property, or the purchase of a second home costing more than £40,000, will be subject to a 3% surcharge.
This means there will be 3pc tax to pay on homes worth up to £125,000, 5pc tax on homes that cost between £125,001 and £250,000, and 8pc on homes worth between £250,00 and £925,000. Homes worth up to £1.5m will be subject to an eye watering 13pc stamp duty and those over this amount will incur a 15pc charge.
Only houseboats, caravans, homes under £40,000 and some multiple purchases are exempt. Anyone left with two properties in England, Wales or Northern Ireland after buying or selling will be hit with the extra 3 per cent stamp duty bill.
Many see this as the death of the buy-to-let boom in the UK. And it isn’t just landlords that will be affected. Put simply, If you buy a second property you will always have to pay the higher rate of stamp duty, even if you plan to live in it and rent out your old one. The only leeway is that you can get a refund of the stamp duty if you sell your old property within 18 months. You will have to claim this back though.
Even if as a couple you decide to buy a separate property for your child, if you are named on the deeds and you already own a home, you will be charged the higher rate.
You are required to pay stamp duty to HMRC 30 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don't miss the deadline.