In a blow to those looking to expand their residential property portfolio, the government has announced a 3% surcharge on stamp duty payable on the purchase of additional residential properties.
Essentially, if you already own a residential property and you plan to add another residential property to your portfolio then you will see a 3% rise across all stamp duty bands from 1 April 2016, including the current nil rate band applying to properties purchased for less than £125,000.
The legislation will typically affect landlords expanding their residential portfolio or those looking to purchase a second or holiday home, but the rules as they currently stand are far reaching and could catch:
There are some exclusions from the surcharge, notably:
Property ownership arrangements can be very complicated for various reasons so, as you can see, what used to be a relatively straight forward tax for most people is about to become a whole lot more complex.
With all of the upcoming changes in property taxation the decision to invest in property, now more than ever, needs to be appraised prior to purchase. If you are thinking of investing in property then please get in touch to discuss your options.
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