Thu 17 Mar 2016
Stamp Duty - 2nd Homes.
As announced at Spending Review and Autumn Statement 2015, the government will introduce higher rates of SDLT on purchases of additional residential properties from 1 April 2016. The higher rates will be 3 percentage points above the current SDLT rates. Click here to read more .
Purchasers will have 36 months rather than 18 months to claim a refund of the higher rates if they buy a new main residence before disposing of their previous main residence. Purchasers will also have 36 months between selling a main residence and replacing it with another without having to pay the higher rates. A small share in a property which has been inherited within the 36 months prior to a transaction will not be considered as an additional property when applying the higher rates. (Finance Bill 2016)
Reform of Non-Residential Rates.
The government will change the calculation of SDLT on freehold and leasehold premium non-residential transactions so the rates apply to the portion of the purchase price within each band. The government will also amend the rates and thresholds so that the portion of the transaction value up to £150,000 is charged at a rate of 0%, the portion between £150,001 and £250,000 is charged at a rate of 2%, and the portion over £250,000 is charged at a rate of 5%. SDLT on non-residential leasehold rent transactions, where the rates already apply to the portion of the purchase price within each band, will be reformed to include a new 2% rate for leasehold transactions with a Net Present Value over £5 million. These changes will take effect on and after 17th March.
Capital Gains Tax.
The government will reduce the higher rate of Capital Gains Tax (CGT) from 28% to 20% and the basic rate from 18% to 10%. The 28% and 18% rates will continue to apply for carried interest and for chargable gains on residential property. These changes will take effect for disposals made on or after 6 April 2016. (Finance Bill 2016) (28)
NOTE: We have included this CGT reference as some Buy to Let / 2nd home people may have thought the reduction in rates would mean a good time to sell but as you can see property still is at previous higher rates.
The Lifetime ISA will help young people save flexibly for the long-term. It will let them save for a first home and for their retirement, without having to choose one over the other. You can find detailed information at Lifetime Isa Explained
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