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Latest News Unravelling The Legals For You

 
 
 

New Buy to Let Stamp Duty Land Tax Rules (Added 15th January 2016)

Buy-to-Let investors will pay thousands of pounds extra in tax when they buy a property following the announcement of special "landlord" stamp duty tax rates applying from April 2016.

Stamp duty rates will be three percentage points higher for buy-to-letters than those buying a property to live in from April next year.

It means the tax bill on a buy-to-ley property costing £250,000 will jump from £2,500 to £8,800. More examples are in the table below.

The same increased stamp duty rate applies to buying other second properties, such as holiday homes, in which the owners do not intend to live full-time.

Value of second property/buy to let (£)  Current SDLT (£) SDLT from 1 April 2016 (£) Increase in tax (£)
150,000  500 5,000 4,500
250,000  2,500 10,000 7,500
350,000  7,500 18,000 10,500
450,000  12,500 26,000 13,500
Source: Blick Rothenberg LLP

The Treasury's Spending Review and Autumn Statement document issued on 25th November 2015 lays out a new set of rates for buyers of residential property for rent and for second homes.

Property value  Stamp duty rate for
owner-occupiers
Stamp duty rate for second
property/buy-to-let
Up to £40,000 Zero 0%
Up to £125,000  Zero 3%
The next £125,000 (the portion from £125,001 to £250,000)  2% 5%
The next £675,000 (the portion from £250,001 to £925,000)  5% 8%
The next £575,000 (the portion from £925,001 to £1.5 million)  10% 13%
The remaining amount (the portion above £1.5 million)  12% 15%

The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporate entities or funds making significant investments in residential property. The government will consult on the policy detail, including on whether an exemption for corporate entities and funds owning more than 15 residential properties is appropriate.

The stamp duty regime was overhauled last year and so-called “cliff edges” in the system were removed. These had triggered large tax bills, based on the entire value of a property, as soon as the purchase price breached them.

This had led to the bunching of properties for sale just below each threshold.
To replace that, increasing rates were applied to portions of a property’s value so that tax bills rose gradually. The overall effect was to lower the stamp duty bill on all properties below £937,500 in value.

 

New Rules for Stamp Duty on House Purchases (Added 4th December 2014)

In the Government’s Autumn Statement, Chancellor George Osborne has made sweeping changes to the way that Stamp Duty is calculated so that all those purchasing a house up to the value of £937,500 will either pay less stamp duty (the majority of people), or the same.  And the good news is the new system seems to be fairer and it took effect from today, 4th December.

So, how has it changed?
Under the present system, stamp duty is calculated as a percentage of the whole property price – rising at various trigger points.  These are 1% for properties bought for more than £125,000, 3% for homes bought for more than £250,000, 4% at over 500,000, 5% at over £1m and 7% at over £2m.

The new system will mean that, in the same way as income tax, rates apply only to the part of the property price that falls within each band when it is bought.  This means:

  • No stamp duty will be paid on the first £125,000 of a property
  • 2% will be paid on the portion between £125,001 and £250,000
  • 5% will be paid on the portion between £250,001 and £925,000
  • 10% will be paid on the portion between £925,001 and £1,500,000
  • 12% will be paid on anything above £1,500,001

Anyone in the throes of buying a property, having exchanged contracts already but not completed, will be able to choose whether to use the old or the new system.

If you are in any doubt as to how much Stamp Duty you will need to pay or how this new system will impact your house moving budget, simply contact us.

 

Brown & Company Solicitors secures Law Society's new quality mark - (Added 23 November 2012)

Brown & Company Solicitors in Market Harborough has secured membership to the Law Society's Conveyancing Quality Scheme - the mark of excellence for the home buying process.

Brown & Company underwent rigorous assessment by the Law Society in order to secure CQS status, which marks the firm out as meeting high standards in the residential conveyancing process.

Law Society President Lucy Scott-Moncrieff said that the Law Society introduced CQS to promote high standards in the home buying process.

"CQS has established itself as the quality mark of the home-buying sector and enables consumers to identify practices that provide a quality residential conveyancing service. With so many different conveyancing service providers out there CQS helps home-buyers and sellers seek out those that can provide a safe and efficient level of service."

Mrs Elizabeth Brown of Brown & Company says: "Brown & Company is delighted to have secured CQS status. Buying and selling a home can be a stressful time. Choosing a solicitor to help in that process just got easier. By looking for a CQS firm like Brown & Company the public can seek out a firm that has proved its commitment to quality.

“The overall beneficiaries will be clients who use Brown & Company when buying a home. They will receive a reliable, efficient service as recognised by the CQS standard."

The scheme requires practices to undergo a strict assessment, compulsory training, self reporting, random audits and annual reviews in order to maintain CQS status. It is open only to members of the Law Society who meet the demanding standards set by the scheme and has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.