Substantial changes to SDLT will be coming into effect from the beginning of April and there is already a lot of confusion over its implications.
Buyers will need to pay an additional 3% on residential property, irrespective of whether they are second homes or buy-to-let properties. The changes will apply to completions that take place on or after 1 April 2016.
A caveat is that we need to bear in mind that the Autumn Statement was delivered on 25 November 2015. If are buying a property and exchanged contracts before 25 November, you will not have to pay the higher tax rate. This is true even if you complete after 1st April.
However, buyers who exchanged after the 25 November and complete later than April 1, should have been aware of the tax rise and therefore will be expected to pay it.
The Treasury has published a consultation paper which explains in greater detail the extra tax and calls for ideas for a better application. The document includes a diagram so that buyers can test if the higher rates apply in their circumstances.
(Click on diagram to enlarge image)
The consultation period has ended on 1 February and the Treasury is yet to publish a summary of the responses they received. New rules are to be finalised and more changes are expected.
Whether you have a portfolio of buy-to-let or holiday homes or simply want to help your children buy their first house, the property team at Mayo Wynne Baxter is here to provide specialist legal advice tailored to your personal circumstances.