Racing the taxman
IF YOU are considering buying that Wall Hall apartment as a second home, you would be wise to move fast. After April 1, you will be hit by a £438,000 tax bill. Agents report that investors are especially keen to make offers on properties by mid-February, to beat the tax deadline.
The stamp duty hike is part of a consultation from the Treasury. You can express your views until February 1 and the policy will be outlined in the Budget on March 16. The higher rates will apply to additional properties purchased in England, Wales and Northern Ireland on or after April 1, 2016.
The proposed charge applies to the portion of the property value in each of five bands. A £3.5 million sale of this flat as a second home attracts stamp duty of 3 per cent on the first £125,000 (a £3,750 tax bill); five per cent on the second £125,000 (£6,250); eight on the next £675,000 (£54,000); 13 on the next £575,000 (£74,750) and a whopping 15 per cent on the rest, in this case £2 million (£300,000). The total tax on Wall Hall is £438,750, an extra 12.5 per cent on the asking price. The exemptions proposed are if this is your only home, or if a company buying the property has more than 15 properties.