In November 2015 the Government announced that as from 1st April 2016 higher rates of SDLT will be charged on purchases of additional residential properties that cost £40,000 or more.
It was announced that a consultation would take place to decide the nitty gritty of the policy detail including whether there would be an exemption for corporates and funds owning more than 15 residential properties.
With only 9 weeks left for anxious buyers to complete their purchases before the new Stamp Duty regulations come into force we still await the finer policy detail.
At CMS we speak to hundreds of property buyers every month and wonder whether the Government is aware of how many ordinary people this onerous 3% hike in stamp duty will hit. Here are some of the recent scenarios we have come across that would mean ordinary people would be hit with an additional 3% property tax charge whilst large, wealthy corporations and business would be exempt:
- Adult children purchasing a property for their parents to live in. Mum and dad are in rented social housing and need to move to be near family. No council exchange is possible so the children, who already own their own homes, take out a mortgage to buy a property for their parents to live nearby.
- Mum and Dad buy a flat in a University town for a child about to start University. Child is not old enough, nor earning enough to warrant a mortgage.
- Family move across country because of a job change. They need to move quickly so decide to rent their existing home out and buy another near the new job.
- A property owner is made redundant and decides to use their redundancy pay out to buy a couple of buy to let properties to run as part of a small business.
- A couple, with their own home, cash in their pensions and want to use the proceeds to buy and let out a property to supplement their income.
- A small builder has spent his life buying property, renovating it and selling it on for a profit. He already owns his own house.
- A couple who work and live in a city centre decide to buy a small flat near the coast as a bolt hole from city life
These are all true examples of recent transactions we have been involved in. None of the people involved are greedy landlords buying up property from under the noses of hapless first time buyers. They are ordinary families trying to do the best for their family, people who are trying to preserve their savings and income into later life, small builders who stop property from crumbling into disrepair and provide homes for the next generation.
At CMS we hope that the Government takes these examples into consideration and that appropriate exemptions are made for ordinary people as well as the big corporates.
Meanwhile, if you are buying a second property and need it to be pushed through for a fast completion at a competitive conveyancing fee please give us a call on 01638 576478