Thinking of buying a second home? It’s worth knowing that stamp duty increases are set to take place from April – meaning that those who own more than one residence will be hit with additional fees.
Contrary to popular belief, it’s not only those operating under the buy-to-let umbrella that will suffer. Anyone who is thinking of buying a second property, even those looking to purchase a holiday home, will be expected to pay the additional fees – and for cheaper homes, this looks to be 10 times the current tax amount.
While the current stamp duty on a property costing £150,000 is only £500 for those buying a second home, from April tax will amount to £5,000.
Although a definitive list of the changes which will be imposed has not yet been finalised, the following guidance from the Treasury has been issued:
- Tax increases will not occur for buy-to-let landlords who own only this property, and currently live in rented accommodation
- If the purchase of your second home is due to your first property not yet being sold, you will need to pay the increased stamp duty but are eligible for a refund for up to 18 months
- Married couples may not own one property each – a married couple counts as ‘one unit’ and any additional property will incur extra rates
- Parents looking to apply for a joint mortgage in order to help their children will be subject to the additional fees – they can still act as a guarantor without becoming liable
- If you are buying a property as a couple, the additional taxes will occur if either party already owns a home – regardless of whether or not this is the first purchase for the other party
- Increased taxes will not apply for those who exchanged contracts before the autumn statement
More guidelines are expected to be issued in the coming months. If you have any questions, please don’t hesitate to contact the Hawkesford team on 01926 430 553.