The 1st April deadline for an increase in Stamp Duty for buy-to-let investors and second homebuyers is moving ever closer, and the price of missing this date is high.
Tax specialists are warning that many property buyers could be caught out by the surcharge, as the deadline is 1st April, rather than the start of the new tax year on 6th April.
Missing the deadline by just a day will make buyers subject to the additional 3% Stamp Duty charge. This increases the amount of tax charged on the average property in England and Wales, costing £188,270, by a huge £5,648. In London, the surcharge could add over £15,000 to the cost of buying an average property.
The Director at accountancy firm Smith & Williamson, Chris Springett, insists that anyone looking to purchase a residential buy-to-let, investment property or second home must be sure that they can complete by midnight on 31st March 2016.
This applies unless contracts were exchanged on or before 25th November last year.
Springett adds: “Missing the date by a few days could cost thousands of pounds and I fear many people could inadvertently miss out.”
The Stamp Duty charge on a home costing £188,270 is currently £1,265. However, this will rise fivefold to £6,913 from 1st April for buy-to-let landlords and second homebuyers.
Stamp Duty on the average London property, costing £514,097, will more than double from a current £15,704 to £31,127.
Springett concludes: “The changes are due to apply from April Fool’s Day, so anyone seeking to buy a second home, buy-to-let or residential investment property should keep this in mind.”1
Many landlords are already rushing to buy ahead of the deadline in order to avoid paying the additional tax.