Stamp Duty Rates

From April 2016 Stamp Duty will change for buy-to-let investors, you won’t have to pay stamp tax on the first £125,000 of a property, but you will be hit with a higher rate of Stamp Duty.

The tax change is designed to help ease the housing shortage, with anyone who buys extra residential property liable to pay an additional 3% in stamp duty. 

On a positive note, as the rules currently stands, investors can offset the additional stamp duty, along with other purchase costs, against capital gains on the property in the future. That could change in future tax amendments though.

For parents wishing to help their children onto the property ladder, the changes do not spell good news. You can be a guarantor for a loan, but if you are going to be named on a joint mortgage on the title deed you will be hit by the tax. This also applies to couples that wish to buy a property each.

Married couples and civil partners will be treated as a single unit living together. Additional properties purchased by either person will attract higher rates.

If you decide to buy a second property you will always have to pay the higher rate of Stamp Duty, even if you plan to live in the property and rent out your old one. If you keep your old home at the time of completion you will need to pay the extra stamp duty charges, even if you move into a new main residence.

The only leeway is that you can get a refund of the stamp duty if you sell your old property within 18 months. This aims to help those who may hit delays in the selling process. You will need to apply for the refund through HMRC.

How much is Stamp Duty if I’m buying a home that I’ll live in, in Hackney?

Whether you are looking to buy the home you’ll live in, in Hackney or anywhere in the UK (not a buy-to-let property or a second / holiday home) you won’t pay any Stamp Duty on the first £125,000. You’ll then pay 2% on the portion up to £250,000, and 5% on the portion up to £925,000. From that point up to £1.5 million it’s 10% and then 12% on anything over £1.5 million.
How does it affect you if you’re looking to buy a property to be let in Hackney?

The new Stamp Duty rule is the same wherever you wish to purchase your buy-to-let property in the UK. From April 2016 as its your second home or buy-to-let property (it won’t be your main home) you will have to pay an additional 3% on each tier of Stamp Duty.

New Stamp Duty Rates… How does it affect you

This is a great if you are a first-time home buyer. It’s hoped that by making buy-to-let less appealing for investors, demand for investment properties will fall, making the property ladder more accessible for first-timers.

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