Counting down to the new stamp duty
Definition: Stamp duty land tax (or Land and Buildings Transaction Tax in Scotland) is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay.
From 1 April 2016, anyone who buys additional property, including buy-to-lets and second homes, will have to pay an extra 3% of the purchase price in stamp duty as illustrated by this handy infographic from Goldings Auctions. This does not apply to land, commercial or semi commercial units, only residential purchases in personal or a limited company.
For those landlords who want to complete their purchase of property before stamp duty comes into effect, time is of the essence. There are many landlords who are trying to complete their purchase before the deadline and this means that the buying process will be slower – valuers, lenders and solicitors will be busier, and completions will take longer to go through.
There is still time to source finance and complete on a property before April but the deadlines are tighter. It is therefore essential to start the process now, which is as follows:
• Source a property you want to purchase
• Apply to a lender or broker
• Instruct the valuation
• Commence the legal process with solicitors.
The changes in stamp duty will add costs to your property investment if you purchase after 1 April 2016. Act now to ensure you complete your purchase before the deadline. The team at CPC Finance will be able to assist in helping make sure your transaction is completed in the timeliest manner possible.
If you’d like more information on the implications of the new stamp duty tax, read our article here.