Mortgage Intelligence Update: Is the industry ready for the Stamp Duty hike?
Head of Mortgages and Insurance Stephanie Charman explores the key highlights from the upcoming Stamp Duty changes from the government.
Plans to raise the Stamp Duty Land Tax (SDLT) on second homes were initially announced in 2015’s autumn statement from Chancellor George Osborne. Now the changes are approaching fast, and as of 1 April an extra 3 per cent stamp duty levy will be weighed on buy-to-let purchases and second homes (over £40,000). This could initially cause an increase in applications as people rush to complete purchases before the increase comes into effect.
Since the announcement on stamp duty in November, more details have emerged over the festive period. Although the specifics surrounding married couples, joint ownership, businesses, foreign ownership, multiple holdings and low value transactions are still being consulted over by the government, experts have already suggested that the stamp duty rules surrounding most areas affected are tighter than expected.
One of the more controversial specifics is that the additional stamp duty levy will be applied on all purchases, even those up to the value of £125,000, that fall under the criteria of a second home. This is a surprising move as even a main residential purchase on the first value band is not subject to any stamp duty land tax at all. Now as of 1 April, rates of stamp duty will be as high as 15 per cent for certain high value homes, which could indeed cause many investors to pull out of the industry altogether.
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