Are you aware of the Stamp Duty Land Tax (SDLT) Changes April 2016?
The Government plans to raise Stamp Duty Land Tax (SDLT), in April 2016, on second homes. Final rules on married couples, joint ownership, businesses, foreign ownership, multiple holdings and low value transactions will be announced in the Budget on the 16th March 2016.
However, it appears that a 3 percent surcharge will be levied on each stamp duty land tax band when an additional residential property is purchased by someone who already owns a home. This will include the £1-£125,000 band where duty is not payable at present on main residences.
It is expected that the Government will treat married couples and civil parties as a single person. Therefore, couples can own one property between them but if they then purchase another property in either persons name that purchase will attract the higher rate of stamp duty.
More and more parents are assisting their children to get on the property ladder. In the past parents have acted as guarantors under their childrens’ mortgages and not become part owners of a property. In that situation there is no additional stamp duty to pay under the new rules.
However, guarantor mortgages are rare these days and as a result parents have had to take out a joint mortgage with their child which means they have to become part owners of the property. Under the new rules this would make them liable to pay the additional stamp duty if they already own a home themselves. For example: On a £300,000 property that would equate to an extra cost of £9,000.
The new rules will also affect the Buy to Let market. For example: anyone buying a £200,000 buy to let property before April will pay stamp duty of £1,500. From April that will rise to £7,500.
For more information from solicitors in Doncaster, please contact Tony Dallman on 01302 834744