Wednesday 9 December 2015

New Stamp Duty Changes April 2016

Q&A: STAMP DUTY CHANGES

Who is affected?
Those buying a buy-to-let property or a second home will face higher stamp duty tax bills. 
What are the changes?
Under new rules, 3 per cent will be added to every single stamp duty band for buy-to-let and second homes - including the previously tax-free element.   
For those snapping up a £275,000 home, the current rate of stamp duty means a £3,750 stamp duty bill.
This is worked out by:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £25,000 = £1,250
Total SDLT = £3,750
But adding the 3 per cent surcharge will see the price of the tax rocket for landlords.
3% on the first £125,000 = £3,750
5% on the next £125,000 = £6,250
8% on the final £25,000 = £2,000
Total SDLT = £12,000 
When are the changes coming into effect?
From 1 April 2016.  
Can landlords offset these costs?
Yes. They can claim stamp duty back later against capital gains tax bill. 
If they sell up their property later at a profit, they can offset purchase costs against any eventual CGT, which includes stamp duty. 

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