There are various times when additional stamp duty needs to be paid but the main one is if you already own a property and a buying a second property.
These are a few instances when the additional stamp duty may need to be paid.
- If you own a home and are buying another property (say a rental or a holiday property), the additional stamp duty will need to be paid.
- If you are buying a main home but have not yet sold your main home, you will need to pay the additional stamp duty. However, if you sell your main home within 3 years, you can request the additional amount of stamp duty that you have paid to be refunded to you.
- Some think that by having a company buy a rental property, this will mean the additional stamp duty is not payable as the company does not own another property. This is incorrect. A company must always pay the additional stamp duty.
- If you buy a property with someone else, and one of you have a second property, the additional stamp duty must be paid on the whole property and not just the share that the person with the second property may have. This is one that catches many people out.
- If you have been given a share of a rental property by a parent or grandparent, this means you have a beneficial interest in a residential property and then when you may buy your own property, you will need to pay the additional rate of stamp duty.
- The property that you may have a beneficial interest in is not a property that has to be in the UK. It can be a property that you have anywhere in the world.
This list is not exhaustive and not full, there may be other times when additional stamp duty may need to be paid, so always check with your accountant or solicitor first to ensure you are budgeting for the right amount of stamp duty to be paid.
Please always seek professional advice before taking any action. We are happy to answer questions in future issues. Please send your questions through the contact us page on our website: www.champconsultants.co.uk
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