Nearly two years ago, the additional 3% rate of stamp duty came into force on second homes, but we are finding that buyers are still unsure of whether it applies to them.
They are not the only ones who are confused. In a recent story in the Money section of The Sunday Times, they uncovered that solicitors, tax advisors and even HMRC are giving conflicting advice.
So Who Does The Extra 3% Apply To?
The bottom line is that if you buy any property in addition to owning your main home you are required to pay an additional 3% on top of the stamp duty you already owe. So this applies to buy-to-let properties or second homes.
Have People Ended Up Paying Too Much?
There is room for confusion as many have found – and have ended up paying way over what they should have.
The Sunday Times featured a case study of a couple who were spared the surcharge because of a transitional rule, “which even several tax experts we contacted were not aware of” they cite. “This states that a buy-to-let owner who sold their principal residence before November 25, 2015 the date the additional stamp duty rate was announced does not have to pay the extra levy if they complete the purchase of a new main residence on or before November 26 this year.”
Don’t Be Caught Out
But even this couple paid the surcharge – many thousands of pounds – and had to be reimbursed by the tax man. Without good advice they may have lost out on their money – or the purchase of their second home – altogether. It is up to the property buyer to get it right in the first place – if you make a mistake there’s no saying whether the tax man is going to hunt you down to give you a refund.
It Pays To Get The Right Advice
Always check with HMRC in the first instance and give them all your specific information before paying. Or call 0300 200 3510 or post details to BTStamp Duty Land Tax, HM Revenue & Customs, BX9 1HD. .
If you want to buy or sell through us, we have excellent financial advisors at Barlow Barton who can help untangle any complicated tax implications for you. Don’t get stung for tens of thousands of extra pounds when you may not need to.
For excellent, impartial advice today contact us