Make sure you have done your sums before you proceed with that additional property purchase

A nasty shock awaits those who have not fully calculated the full implications of the latest Stamp Duty Land Tax (SDLT) additional rate warns Jim Bryant. Do not forget this additional rate will apply even if you have a share in another property so if you are sharing the equity with bank of Mum and Dad who already own another property, a sibling or a husband or wife you will be caught by this. The SDLT is increased by 3% for purchasers of a property. Good news for first time buyers, they are exempt from SDLT on the first £300,000 for the purchase of a property up to £500,000.

Stamp Duty Rates

Residential Property

Consideration                 Within Each Band       

£0-125,000                                           0%

£125,001-250,000                            2%

£250,001-925,000                            5%

£925,001-1.5m                                 10%

£1.5m+                                                  12%

Non-Residential Property

£0-150,000                                             0%

£150,001-250,000                              2%

 £250,000+                                              5%

Timing

Stamp Duty returns must be filed within 14 days of the effective date of the transaction, which is also the due date for payment of any tax. 

Buy To Let
From April 2017 tax relief for interest paid was restricted to basic rate rather than tax payer’s marginal Income Tax rate, this has brought substantial disadvantage for landlords who have borrowed to buy their properties ( as the majority do).
2017/18- 25% of interest was relieved at the basic rate, the remaining 75% was deducted from income.

 2020/21- all the interest will be restricted to basic rate relief only.