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Act now for second home purchase to avoid extra stamp duty

The window of opportunity to avoid the three per cent additional stamp duty (SDLT) on a second home is closing in.

Tim Main, head of sales at Balfours Property Professionals says:  “I would urge anyone sitting on the fence deliberating over a second home, be it a buy to let, a place in the country or by the sea, this is the final window of opportunity.”

April 1 sees the introduction of the new, second home 3% SDLT rate.  “Right now it is still achievable and purchases can still be made, but with conveyancing taking longer agreeing a deal in March is unlikely to meet the completion deadline of March 31.”

Tim continues: “For example, if you are buying a second home with a purchase price of £300,000, the extra 3% Stamp Duty would equate to £9,000 (3% of the entire price). This is in addition to the £5,000 regular Stamp Duty bill on a home of this value, making the total Stamp Duty payable an eye-watering £14,000.

He says that there remains much uncertainty regarding the detail of the second home SDLT: “For instance a couple who are cohabiting, but have no legal tie appear to be able to own one property each.” However the government will treat married couples and civil partners living together as one unit. This means any homes owned by either partner will be included when the stamp duty bill comes due on the purchase of a second or subsequent property.

“Hence our advice is that if you are likely to be judged as a second home owner and you want to avoid the additional 3% stamp duty, it is best to act now. Full clarity is still awaited and will be announced in the March budget,” Tim adds.

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