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Stamp duty for 2nd homes/buy-to-let properties

Stamp duty tax cut July 2020

By in Covid 19 with 0 Comments

Happy days with the new changes on the recently announced stamp duty holiday.  The main thing you need to know, is that you can save a pretty penny and here is how…

Chancellor of the Exchequer, Rishi Sunak announced the stamp duty holiday on Wednesday 8th July, but will come to an end on 31st March 2021.  The welcomed tax cut will affect 90% of buyers and save on average £4500.00 he said.

So, the new and increased threshold’s for investor’s buying multiple property are as below (applies to properties bought for £40,000.00 or more, excluding caravan’s, mobile homes and houseboats; if left in a will; 1 partner transfer’s their share to the other via a separation or divorce or if the property is gifted – find out more):

3% surcharge only* – up to £500,000.00

8% – £500,001.00 to £925,000.00

13% – £925,001.00 to £1.5 million

15% – £1.5 million+

*1st time buyers will have zero charge

Historical rates – buy-to-let/2nd home rate:

3% – up to £125,000.00

5%  – £125,001.00 to £250,000.00

8% – £250,001.00 to £925,000.00

13% – £925,001.00 to £1.5 million

15% – £1.5 million+ (remains un-affected)

Both the 3% surcharge and the SDLT has been charged to investor’s since April 2016 announced by George Osbourne, who are essentially buying additional properties (i.e. 2nd home/but-to-let).  Because the stamp duty threshold has increased, those buying a 2nd home, will also benefit.

Remember, if you had completed on a purchase before July 8th 2020 the old rates will apply.  If you have not paid your full payment but have already exchanged contracts – you will still benefit from the new rates.

What is good to know, is that, if you give away or sell your main home within 3 years of buying your new home – you can apply for a refund here.

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