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Will the annexe to a main house attract additional 3% stamp duty?

Lots of people have been focused on completing property transactions prior to 31 March, the last day when second homes did not attract the additional 3% SDLT.  

Now more people are focused on the effect of this legislation and in particular how it is going to affect a flat or annexe attached to the house.  To be classified as a separate dwelling for tax purposes an annexe must have independent access but could still be physically part of the same building.  

To be liable to the new 3% stamp duty, annexes must be valued at £40,000 or more and be able to be sold as a separate residence.  Planning permissions restricting the use of annexes solely for the purpose of the main house allows the annex to be exempt to the additional 3% tax.  

Separate cottages however, that can be sold separately, will now fall liable for the extra 3% stamp duty.

Tim Main of Balfours comments, "stamp duty being paid on flats and annexes integral to a main house, appears to be an unintended consequence of the new tax and possibly not what the government wanted as they have recently been encouraging extended families to live together.”

 

 

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