Byzantine stamp duty rules and their unintended consequences

problems. Mr Osborne introduced the measure, along with other tax changes, as a way of trying to dampen enthusiasm for buy-to-let.

Under the new rules, anyone who buys an additional residential property, including holiday homes and buy-to-lets, has to pay an extra 3 percentage points in stamp duty.

All property transactions above £125,000 are subject to a stamp duty charge of at least 2pc, and the 3pc charge is on n top of this. This means that purchases urchases of between £125,000 and £250,000 are now subject to a 5pc charge, and then hen purchases up to £925,000 925,000 will incur an 8pc charge. harge. Homes worth up too £1.5m are now subject to 13pc stamp duty and those ose over this amount will incur a 15pc charge. e.

This means, as in n the example of Miss ss Fernandez, a purchase of a £500,000 home will now incur an additionaladditiona £15,000 stamp duty payment.paym “Accidental“Accid landlords” like Miss Fernandez or 26-year-old26-year Claire Williams,Willia from west LondonLon (left), have beenbe caught out by this.t Miss Williams never meant to become a landlord but got caught out when she bought a house without realising it had “tenants in situ”. SheS went through withw the transaction, only to discover when she bought her main home shortly afterwards that the higher rates would apply.

Couples who come together already owning one or two properties in their own names face other difficulties. If they marry, it is assumed under stamp duty rules that they are both owners of property, even if the technical ownership is in one person’s name.

This gives rise to financial incentives not to marry or even for married couples to divorce. Last year this newspaper reported the cases of numerous married couples who found themselves caught out by the system. Landlord Sajj Ahmed gave his buy-to-let property to his wife, which was a common practice ahead of the changes to tax relief that were recently introduced. However, as the property was mortgaged he was forced to pay stamp duty on the transaction, despite it occurring within a marriage. This ended up costing the couple thousands of pounds.

As Telegraph Money has reported, the complex rules have left conveyancers and property lawyers scratching their heads with new circumstances continually testing the system.