The deadline is looming for property owners and investors who don’t want to be hit by a higher rate of tax when they purchase a new property.
We are approaching the end of the transitional period for the newer rules on Stamp Duty Land Tax (SDLT) relating to the higher rate of tax which is applied when an individual purchases an additional residential property.
One key point arising from this is that anyone who owns investment properties and who sold their last main residence more than three years ago only has until November 26th, 2018, to complete the purchase of their new main residence in order to still benefit from the “main residence replacement” relief which enables the purchaser to avoid the higher rate of tax.
After that date, the relief can only be claimed if you purchase a new main residence within three years of the sale of your last main residence.
Here is an example of how the higher rate of tax may be avoided:
Miss A has just returned to the UK after working abroad for a number of years and is in the process of purchasing a new home, which she hopes to complete on or by the beginning of November 2018.
She sold her previous main residence in 2008, before moving abroad, but retained a buy-to-let property in the UK. Miss A has only lived in rented accommodation since she sold her last home.
Provided Miss A purchases her new main residence on or before November 26th, 2018 and has not acquired another main residence in the interim period, she will be treated as replacing her main residence and the higher rates of tax will not apply.
SDLT can be an extremely complicated issue, particularly following the introduction of higher rates for additional properties and first-time buyer relief. Many factors can influence the rate that is applied and the reliefs that can be claimed.
Here at Punch Robson we have specialists in the field who can tailor any advice and answer any questions you may have on the topic.
If you would like to talk the issue through with one of our experts, then contact us on 01642 754050 or request a call back.