A Shropshire lawyer who specialises in property legislation has warned buyers to be aware of new Stamp Duty Land Tax provisions coming in from April bringing in higher rates of Stamp Duty Land Tax on purchases of most additional residential properties.
Debby Gittins, a partner at Wace Morgan Solicitors of Shrewsbury, says that the change will affect a wide range of people.
“Buy-to-let landlords are set to be hit with new costs from April when a controversial extra three per cent stamp duty charge is introduced,” says Debby.
“The change will add thousands of pounds to buy-to-let property transactions but it will also affect anyone owning a second property that isn’t their main home and buying another, or replacing the one they don’t live in.
“This could be parents purchasing a first property for their children or a couple buying a home together where one is already a homeowner.”
Chancellor George Osborne has focused on landlords in recent budgets and spending reviews.
First he announced a cut in mortgage interest relief from 2017 but before that landlords are set to be hit with the extra three per cent charge on each stamp duty rate band, which vary by the value of the property involved.
For example, anyone buying a £200,000 second home or buy to let before April pays stamp duty of £1,500. This is based on paying zero per cent on the first £125,000 of the property value and two per cent on the portion between £125,001 and £250,000.
However from April, landlords will have to pay three per cent for the first £125,000 and five per cent instead of two per cent on the amount between £125,001 and £250,000.
The higher rates will only apply to additional properties purchased in England, Wales and Northern Ireland on or after 1 April 2016.
The new provisions for the proposed additional Stamp Duty Land Tax payments will not be finalised until 16 March 2016 and will come into effect on the 1 April 2016.
For more information contact Debby Gittins on 01743 280 100