Unless you are purchasing a property for less than £40,000, you will be liable to pay an extra 3% in stamp duty. The stamp duty hike was first announced by George Osborne in the Autumn Statement and will affect both buy-to-let landlords and investors, and anyone buying a second home.
The new rates of stamp duty will have a substantial impact on the cost of buying a second home or buy-to-let property, for example – the duty on a property costing £200,000 has risen from £1,500 to £7,500.
A second home is essentially anything other than your main residence – it could be a holiday cottage, a property bought as an investment or helping another family member to get onto the property ladder.
If you are buying a property for a child or grandchild and you are named on the deeds then you will be counted as a second home owner and charged the additional stamp duty. Helping out with a gift of a deposit will not be a problem – only part-owning the property.
If you are moving house and buy your next property before selling the one you are living in, you will ultimately be exempt from paying the extra 3% stamp duty charge. Unfortuantely however you will have to budget for paying the stamp duty at the time of the purchase; you then have three years to sell the property and claim back the extra stamp duty from HMRC.