Stamp Duty Changes From 1st April 2016

Who does the new stamp duty affect?

The people that have been affected from the new stamp duty changes are people involved in buy to let, who have a holiday home or even parents that purchase a property for their son/daughter. From the 1st April there is now an added 3% on existing stamp duty rates for example, if the property is worth between £40k - £125k the new stamp duty land tax is 3% where before landlords and second home owners would have had 0% SDLT to pay. There are some properties that don't fall under the stamp duty changes such as caravans and houseboats and properties worth less than £40,000.

What might landlords start doing differently?

What might landlords start doing differently?Landlords looking to purchase a buy to let might start setting higher rents for the tenant to compensate for having to pay an extra 3% added onto the stamp duty land tax. Another theory on what might happen is that there will be a drop in the number of landlords purchasing properties to rent them out now as it is more costly for them and the returns won't be attractive enough. Yet another possibility is that the landlord will expect the vendor to swallow at least some of the added purchase costs, and this is certainly something we have seen at Trinity, with some purchases which didn't complete before the 1st April deadline stalling further as buyer and vendor try to negotiate a new price.

How does purchasing a property for your son/daughter affect you in the new stamp duty changes?

Normally parents will help their kids out with purchasing a property however now these changes have come in it may be a little more difficult. If the parent's name is on the deeds of the property they have bought their son/daughter then unfortunately they will be charged with the higher rates. Even if the parent and their son/daughter have a joint name on the deeds then you will still be charged with the higher rates. The only way you will not be charged with the higher rates is if the son/daughter's name is the only name on the deeds.

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Published on 25 April 2016

Source Trinity Sales Wakefield

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