House, green, moneyIn the recent Budget announcement, the Chancellor confirmed that there will be a 3% Stamp Duty surcharge on additional properties. This change will take affect from the 1st April. 

Because stamp duty is tiered, you will pay a different stamp duty rate on different portions of the property value, take a look at these examples to see how it works:

 

 

This is a breakdown of how the current total amount of Stamp Duty Land Tax is calculated on an additional property, based on the rules before 1st April 2016, on a purchase price of £250,000.

Purchase price bands (£)

Percentage rate (%)

SDLT due (£)

Up to 125,000

0

0

Above 125,000 and up to 250,000

2

2,500

 

Total SDLT due

2,500

 

This is a breakdown of how the new total amount of Stamp Duty Land Tax will be calculated on an additional property, based on the rules from 1st April 2016, on a purchase price of £250,000.

Purchase price bands (£)

Percentage rate (%)

SDLT due (£)

Up to 125,000

3

3,750

Above 125,000 and up to 250,000

5

6,250

 

Total SDLT due

10,000

 

It is worth noting that if you buy a new main residence and the sale for your previous main residence is delayed, you will pay the higher rates as you own two properties.  However, you may obtain a refund for the amount above the normal Stamp Duty Land Tax rates if you sell your previous main residence within 3 years.  If you already have two or more properties and you sell your main residence, you won’t have to pay the higher rate if you buy a new main residence within 3 years.

To find out more about this and to calculate other amounts, you can visit the Government’s website here.

 

If you are looking to purchasing an investment property, please contact our Lettings Department on 01252 514000 or lettings@mackenziesmith.co.uk.

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