When you’re about to buy a property that you may not live in all of the time, you will have to pay an extra 3% in stamp duty. This is irrespective of which part of the UK you live in.
However, there is an exception to this rule, and it affects those who have never owned a property (First time buyers) and are thinking of purchasing a buy-to-let property. First time buyers will, in this case, pay typical home mover rates.
Second homes and buy-to-let properties have stamp duty rates that are tiered. Investors who live in England and Northern Ireland will have to pay the following costs
|Portion of Property Price||Stamp Duty Percentage|
|£0 – £40,000*||0|
|£0 – £125,000**||3|
|£125,001 – £250,000||5|
|£250,001 – £925,000||8|
|£925,001 – £1.5m||13|
*If the total prices are £40,000 or less.
**If the total prices are more than £40,000.
Stamp Duty Exemptions
Some buy-to-let properties come with stamp duty exemptions but they only come into effect if you are in a civil partnership or you’re married and one or both of the partners owns a property. In a case such as this, you will need to pay the stamp duty regardless of how many properties you own.
If the property has not been purchased by an individual but a company the additional stamp duty will still apply irrespective of how many properties are owned by the company.
First Time Buyers
You will not have to pay stamp duty if you’re a first time buyer and your home is a buy-to-let property. However, you will not qualify for stamp duty exemption as it only applies to people who are intending to live in the property. You will, instead, pay the standard stamp duty rates.
If you decide to buy a new house before you have sold your old one you will have to pay a higher stamp duty rate. The good news is you can claim the rate back within 3 years of buying a new home.
Interest in a Property
If you have inherited up to 50% of an additional property or you have financial interest in one as you’re in a partnership it is unlikely you’ll need to pay additional stamp duty.