How and when do I pay the extra tax?
The additional stamp duty rate is payable within 30 days of your completion date, at the same time as your main stamp duty bill. A tax return must be submitted to HMRC detailing what you owe, and the bill paid simultaneously. In most circumstances, your solicitor or conveyancer will arrange this for you.
What counts as a ‘main residence’?
Your main residence for stamp duty purposes is the place where you and your family spend most of your time. The taxman will assess this by looking at where you work, where your children are registered at school and where you vote.
What if my main home is abroad?
If you own a property abroad and want to buy an investment property in the UK, then the extra stamp duty rate will still apply.
Can I put our family home in my wife’s name to avoid the tax?
When it comes to stamp duty the taxman classes married couples as a single unit. So, it doesn’t matter whose name your properties are in, if you as a couple own more than one at the end of the transaction then the additional stamp duty rate applies. If you aren’t married, then you could avoid the additional stamp duty rate if only one of you is named on the deeds of your main residence and the other partner buys the investment property in their name alone.
What if I’m a first-time buyer?
If you don’t already own any property and are looking to invest in a buy-to-let, then you won’t pay the additional stamp duty rate as you will only own one property. Note that you will not qualify for first-time buyer stamp duty relief as it can only be used for a property you intend to live in.
What if the investment property I’m purchasing is abroad?
You won’t have to pay the additional rate on investments purchased abroad as stamp duty is only payable on UK property.
What if I inherit a property I want to rent out?
Stamp duty isn’t payable on inherited properties. But if you go on to buy another property you may have to pay the additional rate if it will result in you owning more than one property.
What if I buy a home with an annexe?
If you purchase a property as a main residence, and it has an annexe or granny flat that is bought in the same transaction, is within the grounds of the main residence and isn’t worth more than a third of the overall value of the purchase, you won’t have to pay the additional rate.
However, if the whole property isn’t going to be your main residence, and you own another property, you will pay the additional rate.