2016 buy to let mortgages – the question of stamp duty.
From April 2016 homeowners with more than one property will be subject to a hike in stamp duty. Up until now it has not been clear as to how this increase will work.
Rules have yet to be finalised, but the Treasury has now published a consultation paper which sheds light on how the extra tax will be applied
In effect whether you are purchasing a property as a buy to let or as a holiday home, you will be subject to paying 3% in stamp duty, if at the end of the transaction you own more than one property.
This means that those who want a second property whether it’s to be let out or not, should get on and act now before these changes come into effect. If you want a holiday home which means you will have a second property, then to avoid the 3% stamp duty buy now.
If you are a married couple or in a civil partnership, an additional purchase by either party will attract higher rates as you are classed as one unit.
If as a parent you want to help your child purchase a home, you will be liable for the higher rate if you take on a joint mortgage.
Stamp duty for buy to let from April 2016.
- 3% tax (currently 0%) on property worth up to £125,000.
- 5% tax (currently 2%) on property worth between £125,001 and £250,000.
- 8% tax (currently 5%) on property worth between £250,001 and £925,000.
To get a mortgage for a holiday home or buy to let before April 2016,
call us at Deal Direct on 0800 048 8828.
