Stamp Duty on Second Homes

Residential Stamp Duty Rules on Second Homes

The specialist conveyancing team here at Bartletts is renowned for buying, selling and transferring property with a minimum of fuss. We are experts at advising on stamp duty liabilities.

Since 1st April 2016, property buyers in England and Wales are obliged to pay an extra 3% above the current rates in Stamp Duty Land Tax (SDLT) on purchases of additional residential properties - classified as any property that is not the buyer's main residence - with a value above £40,000.

The legislation aims to make it easier for first-time buyers to get on the housing ladder by increasing the stamp duty bills of buy-to-let landlords and purchasers of second homes. It is also intended to boost the government's affordable housing budget, and slow the rapid growth of the often controversial buy-to-let industry.

New: On 23rd September 2022, the government announced a permanent cut to stamp duty tax in England and Northern Ireland, effective immediately, with the threshold for paying SDLT rising from £125,000 to £250,000. The 3% surcharge for buy-to-let properties and second homes remains in place under the new higher threshold system.

  • Residential Stamp Duty - New Legislation
Various types of property transaction are affected by the new legislation, apart from buy-to-let and second home purchases, including properties being bought as investments, or as homes for family members, such as children, where the title to the property remains in the name of the parent(s). A couple purchasing a home together where one or the other already owns another property fall under the scope of the new rules, as do both British and foreign owners of overseas properties and holiday homes buying an additional property in England or Wales. It is also important to remember that the legislation can apply to home buyers who may not own, but have a financial interest in an additional residential property.

The higher rates (which are dependent on the bracket or band that each portion of the purchase price falls into) apply when, at the end of the day on which a new residential property is acquired, the purchaser owns or has an interest in two or more residential properties. This therefore affects buyers who complete on the purchase of a new home while still legally owning their previous property, as can happen when, for example, the sale of the latter property falls through at the last minute. However, in these circumstances, the extra SDLT paid can be reclaimed, provided that the original main residence is sold within the next three years (36 months), as it is then classified as having been ‘replaced’.

As we can see from this brief outline, the new rules related to the higher rates of SDLT on purchases of additional residential properties can be complex, and home buyers who are not buy-to-let landlords or purchasers of second homes can unwittingly find themselves facing a significant extra tax liability. There are also a number of exceptions to the rules (such as on inherited property), as well as transitional provisions, which can further complicate matters. Penalties for inaccurate SDLT filings can be severe, but are easily avoidable with the benefit of sound legal advice. Louise Nelson is a conveyancing solicitor with over 40 years’ experience handling residential property purchases, and can offer a free consultation on issues related to the new residential stamp duty rules.

Our conveyancing department can assist with sales, purchases, and transfers of residential property across England and Wales. We are experts at advising on stamp duty liabilities.

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Our firm are experts at advising on stamp duty liabilities.

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Louise heads a friendly team of experienced conveyancers. Jenny Thomas, Louise Drewry and Lucy Baines have detailed knowledge of the files they work on, meaning when you call you will get prompt answers and updates.

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Conveyancing Solicitor
Louise Nelson is a Liverpool conveyancing solicitor with over 40 years’ experience. Louise and her team will be happy to offer you a free no obligation quotation over the telephone, via e-mail, or at Marldon Chambers.

Conveyancing Solicitors

All conveyancing and property-related work is supervised by Louise, who has worked as a solicitor for over 40 years. Louise has spent her entire career at our firm. Bartletts has earned the Law Society’s Conveyancing Quality accreditation, which is a difficult stamp of approval to obtain. Every property lawyer at the firm is examined and checked by the Law Society every year. Many firms fail to achieve this mark of quality.

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