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Will the Stamp Duty Land Tax higher rates from 1 April 2016 affect you?

Q. I am purchasing a new main residence but intend to retain my current main residence, convert it to a buy-to-let mortgage and rent it out. Will I have to pay the higher rates of SDLT on the purchase of my new main residence?

 

A. Yes, the higher rates will apply as following the purchase you will own an additional residential property. However, if you sell your previous home within 3 years of the purchase of the new one you will be able to claim a refund from HMRC.

 

Q. I currently live in rented accommodation but own a property that is rented out. I am now looking to purchase my first home, for me and my family to live in. Will I have to pay the higher rates of SDLT on this purchase?

 

A. Yes, the higher rates of SDLT will apply as following the purchase you will own an additional residential property (and will not have replaced your main residence, i.e. sold a current main residence and purchased a new one).

 

Q. I have been living and working overseas for a number of years and purchased a property there which I used as my main residence. I am now returning to the UK and wish to purchase a property here which will become my main residence. I intend to keep my overseas property to use as a holiday home. As I am purchasing a new main residence will I be exempt from the higher rates of SDLT?

 

A. No, the higher rates will apply to the UK purchase as following the purchase you will own an additional residential property and will not have replaced you main residence, i.e. sold you current main residence and purchased a new one.

 

Q. I am a property developer, who purchases residential properties, refurbishes and then sells them. Will I be exempt from the higher rates of SDLT on any purchases that I make after 1 April 2016?

 

A. No, there are no reliefs or exemptions from the higher rates for property developers. The higher rates will apply to any purchase that completes on or after 1 April 2016.

 

Q. Will my property rental company be exempt from the higher rates on purchases of properties for rental?

 

A. No, the higher rates will apply to all purchases of residential property by companies. There are no reliefs or exemptions from the higher rates.

 

Q. I jointly own a buy-to-let property with 4 friends. The property is worth £150,000, with my share being worth £30,000. I currently live with my parents but am now looking to purchase a home to live in. Will I have to pay the higher rates of SDLT on this purchase?

 

A. No, as your share of the buy-to-let property is under £40,000, the higher rates will not apply.

 

Q. I own a main residence and also jointly own a buy-to-let with my brother. I’m planning to purchase my brother’s share, paying him some cash and taking on his share of the mortgage. Will the higher rates apply?

 

A. Yes, the higher rates will apply to the total amount you give for your brother share, including any mortgage debt that you take on.

 

Q. I am currently living in rented accommodation, having sold my previous main residence nearly 18 months ago. I am now looking to purchase a new main residence within the next few months. I also have a number of buy-to-let

properties. Will I have to pay the higher rates on the purchase of my new main residence?

 

A. Provided you purchase your new main residence within 3 years of the sale of your previous main residence, you are considered to be replacing your main residence, and therefore the higher rates will not apply.

 

Q. I own a holiday home in Cornwall and a house in London which is my main residence. I am in the process of selling my main residence and purchasing a new one. I may not be able to sell my current main residence before I complete on the purchase of the new one – will I have to pay the higher rates?

 

A. Yes, the higher rates will apply, as following the purchase of your new property you will own an additional residential property and will not have replaced your main residence. However, if you sell your current main residence within 3 years of the purchase of the new one you will be able to claim a refund from HMRC.

 

Q. I am purchasing a new main residence and selling my previous main residence but my chain falls though. I go ahead with the purchase of my new property so now own two properties. Will I have to pay the higher rates on my new purchase?

 

A. Yes, you will pay the higher rates. However, if you sell you previous main residence within 3 years of the purchase of your new one you will be able to claim a refund from HMRC.

 

Q. I am purchasing a shop with a flat above as an investment. Both the shop and flat will be rented out. I also own a main residence and a flat which is rented out. Will I have to pay the higher rates?

 

A. No the higher rates do not apply to purchases which contain both residential and non-residential elements.