The stamp duty changes which came into effect from 1st April 2016 will still hold in 2017 and this means that people who are buying an additional property will have to pay at a higher rate. While this additional stamp duty has been introduced to impact on landlords and property investors, it has also impacted on people who buy a new property before they sell their current home.
A buyer in this situation is able to claim back the additional stamp duty charges if they meet the criteria but it does mean that some property buyers will have to pay more money at the time of buying property. This is something to bear in mind if your current plans are based around buying before selling.
For people paying at the normal rate of stamp duty, the charges are as follows:
For people who have bought an additional home, the stamp duty charges are as follows:
On paper, this may not seem like a big change but when you consider the sums of money involved in a property purchase, this additional 3% stamp duty charge can have a big impact on the amount of money that needs to be paid.
As an example, someone buying a home of £275,000 who didn’t own any other property would end up paying £3,750 in stamp duty, which is broken down as follows:
However, anyone who already owns the same property and buys an additional property at £275,000 will pay £12,000 in stamp duty. This can be broken down as follows:
This means someone buying an additional home will pay over three times as much stamp duty as someone buying their only home. With the additional stamp duty charge often being a significant sum of money, it is easy to see why many property owners would reconsider their moves in the property market.