Following the news that the current stamp duty land tax rules will be changing from 1st April this year, new guidance from a Government consultation has been released.
While the measures have not been fully passed, an additional 3 per cent rate will apply to a property purchase if, at the end of the same purchase date, the person who is buying owns more than one property, which applies to sales where completion occurs after 1st April 2016.
It is understood that a purchaser will not have to pay the higher rate of tax if the exchange took place on or before 25th November 2015, even if completion only takes place after 1st April 2016.
However, if exchange took place after 25th November last year, the additional 3 per cent charge will have to be paid if completion occurs after 1st April 2016.
If an individual owns property outside England, Wales and Northern Ireland, this will still be taken into account as part of calculations for how many properties a person owns, and married couples’ assets are also grouped together when defining who a ‘purchaser’ is.
In cases where a purchaser (including a married couple) is buying a new main residence, the new 3 per cent additional stamp duty rate will not be incurred if they already own a buy-to-let property, but it will apply if other types of property are owned.
For any parents seeking to buy a property for their child, if a parent is the named owner then they will still have to pay the higher stamp duty rate.
However, if land is purchased that does not form part of the same owner’s residence it is expected that it will escape the additional tax.