From the 1st of April 2016, the government will introduce a new Stamp Duty levy which will be payable when you purchase an additional home in the UK, whether a holiday home or buy-to-let.
The surcharge will apply even if the home you already own (or part-own) is overseas.
The new Stamp Duty rates for additional properties will be:
Purchase Price | Current Rate | New Rate |
Over £40,000 and up to £125,000 | 0% | 3% |
Between £125,001 and £250,000 | 2% | 5% |
Between £250,001 and £925,000 | 5% | 8% |
Between £925,001 and £1.5 million | 10% | 13% |
Over £1.5 million | 12% | 15% |
For an example, if you bought an additional property at a price of £200,000:
- The extra 3% Stamp Duty = £6,000 (3% of the entire price)
- Regular Stamp Duty bill = £1,500
- Total to pay = £7,500
What to look out for…
- If you directly replace your main residence with a new home, you won’t have to pay the 3% surcharge
- If you move into a new home and keep your last home you will initially have to pay the 3% Stamp Duty. As long as you sell your last home within 36 months, HMRC will make a refund.
- If you are buying a home with someone who already owns one, the additional 3% Stamp Duty will apply.
[/av_promobox]
Source: HMRC, March 2016,
https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties
Lifetime Finance Group Limited trading as Super Contractors is an appointed representative of PRIMIS Mortgage Network, a trading name of First Complete Limited, which is authorised and regulated by the Financial Conduct Authority for mortgages, protection insurance and general insurance products.