You are here: Home - Mortgages - Buy To Let - News -

Stamp Duty surcharge should not hit parents buying with child

0
Written by: Moa Aarenstrup
29/01/2016
The Conveyancing Association wants parents who are buying a home jointly with a child to be exempt from the 3% Stamp Duty premium proposed by George Osborne in the Autumn Statement.

In its response to the government consultation on the changes to Stamp Duty Land Tax (SDLT) charges on buy-to-lets and second homes, the CA argued some buyers will end up being legal owners of second properties they have no beneficial interest in.

It gave the example of a homeowning parent buying a property with their child. Even though the child would live there, it would be considered a second home for the parent and the premium would apply.

The CA said the extra 3% SDLT charge should not apply to transactions in which at least one of the owners will live in the property.

However, homemovers intending to switch out their main residence for a new one may also get charged the premium if they do not have enough time to sell their existing property before buying the new one, as they would be considered second home owners under the new rules.

The government has suggested an 18 month time period to allow for the replacement of a main home. If it goes through, home movers who sell within this time would get a refund of the SDLT surcharge.

However, the CA said it would much rather avoid the charge being levied in the first place. It suggested this could be achieved through declarations from buyers that they intend to sell their previous main home.

It argued that while the 18-month time frame will be enough for a majority of transactions to go through, there will inevitably be cases that take longer, which would not be fair.

The government has also proposed landlords buying more than 15 properties will be exempt from SDLT.

The trade body said it suggested a limit of 10 if a criteria had to be set, but said the figures are random and that there is no reasoning or scientific basis behind either of them.

The government is accepting views on the consultation until 1 February.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Stamp Duty proposals could be ‘overkill’ says CML

The Council of Mortgage Lenders (CML) has urged the government to reconsider its proposals to implement a 3% Stamp Duty...

Close