Stamp Duty: the hidden issues

The new surcharge on properties purchased as second homes or as a buy-to-let has caused disbelief and fury – but there is more to it than meets the eye. David Gibbs (left), Taxation Partner at London based Alliotts accountants has the informed view, “The consultation paper makes clear that the proposed Stamp Duty charge is an additional three per cent on the whole of the purchase price. For example under the current rules, Stamp Duty on a second property costing £200,000 is £1,500. From 1st April 2016 this will rise to £7,500 – a 500 per cent hike. The draft rules are very tightly drawn so that the additional rate applies if ‘at the end of the day of the transaction’ an individual owns more than one property. “There are exceptions. If you are replacing your main home you are exempt from the charge. So if for example, you own a second property and purchase a new ‘main home’ then the additional charge won’t apply.  Buyer beware – the old home must have been sold by the end of the same day that the new home is purchased. The additional rate will apply if it is. There is a proposal…

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