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Q&A: BUY TO LET STAMP DUTY 2016 CHANGES

Posted on Tuesday, December 8, 2015

 

Q&A: BUY TO LET STAMP DUTY 2016 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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