Updated 5 October 2022
How to avoid stamp duty on a second home UK
If you are in the process or considering buying a second property in the UK you will be liable for stamp duty on the purchase. This stamp duty on second properties was introduced in 2016 and applies to house purchases in the UK, Northern Ireland and abroad. No one likes to paying tax, and this article will look at how it can be avoided. First, we have complied at table so that you can view at glance the amount of stamp duty tax in relation to the house purchase price.
New additional property SDLT rates from 2016
|Property purchase price From||Property purchase price To||Stamp Duty Rate 2021|
|£0||<£40,000||0% ** See Exceptions|
Source : Policy paper Stamp Duty Land Tax: higher rates on purchases of additional residential properties
Stamp Duty on Second Homes Exceptions
If you are buying a new property, but will be selling your existing property so that at the end of the day you have only one residence, you are able to claim a refund. Please note, the refund claim must be made within 36 months of the transaction. Other Exclusions include :
First Time Buyers
If you are buying a buy to let property and have never owned a property, you will be exempt from the higher second home rate. However, you will not qualify for any first time buyer discounts on stamp duty as you are not intending to live in the property.
House purchase protection insurance
If you are a first time buyer or buying your second home as a buy to let property, you may wish to consider taking out a policy to cover you against fees that you incur should the vendor subsequently drop out of the sale. Vendors drop is more common than you may think, with a survey by which indicating that 3 in 10 house sales collapse, that is over 25%! Don't panic as
FAQs Buy-to-let/second home stamp duty FAQs
Is stamp duty payable on inherited property?
If the share is 50% or less, then you will exempt from any house purchase after 36 months have elapsed. If you inherit the home 100%, no stamp duty is payable. However, if you do subsequently buy an additional property, you will be subject to the higher rate of stamp duty.
What if the property comes with a granny flat or annex?
If it is a single property purchase, the granny flat or annex will not be deemed a second property, and you will only be subject to the standard rate of stamp duty.
When has this stamp duty to be paid on a second property purchase?
The stamp duty should be paid within 30 days of purchase, in most cases your solicitor will look after this on your behalf as art of the service provided. When you purchase a new property, it is a good time to also consider carrying out any major jobs such as