Exchanged on a property and now hit with extra 2% SDLT?

Exchanged on a property and now hit with extra 2% SDLT?

0:01 AM, 31st October 2024, About 14 hours ago 5

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We exchanged on a property to add to our company residential buy to let portfolio costing £490,000 last week.

It would seem that we will be charged an extra 2% on top of the 3% stamp duty that we were due to pay at completion on 15th November.

If this extra stamp duty had been added at a specific future date this would have encouraged landlords to buy any stock before the new rates came into play. This would have added stimulus to the property market and ensured greater availability of rental property.

The unintended consequences? This stamp duty increase is a huge hammer blow to any landlord who has already exchanged on a property but cannot complete on the day of the budget.

So now anybody in a similar situation as me has the choice of trying to find the extra 2% stamp duty at very short notice or having to withdraw from the purchase and incur the loss of the £49,000 deposit.

Noel


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Cider Drinker

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9:40 AM, 31st October 2024, About 4 hours ago

Don’t panic!

This measure applies to transactions with an effective date (usually the date of completion) on or after 31 October 2024.

Where contracts are exchanged prior to 31 October 2024 but complete or are substantially performed on or after that date, transitional rules may apply.

This measure does not apply to Scotland or Wales where devolved land transaction taxes apply.

https://www.gov.uk/government/publications/stamp-duty-land-tax-increase-to-the-higher-rates-of-stamp-duty-land-tax-and-to-the-single-rate-payable-by-non-natural-persons/380cf2b3-cc05-4457-9624-224485c29fb5

Jason

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9:42 AM, 31st October 2024, About 4 hours ago

The nature of the game I’m afraid. If it was the other way round you would have benefited. This budget and government are killing the PRS this is likely the last straw for re-investment.

Jason

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9:44 AM, 31st October 2024, About 4 hours ago

Reply to the comment left by Cider Drinker at 31/10/2024 - 09:40
Good spot!

Geoff1975

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10:06 AM, 31st October 2024, About 4 hours ago

New rates don’t apply if you have already exchanged. It’s in the budget small print bottom of page 49. I should have exchanged by now but solicitor went missing for 3 weeks so my bill has increased by £8.5k. Unfair to make changes so quickly in my opinion.
https://assets.publishing.service.gov.uk/media/672232d010b0d582ee8c4905/Autumn_Budget_2024__web_accessible_.pdf

Cider Drinker

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10:23 AM, 31st October 2024, About 3 hours ago

Reply to the comment left by Geoff1975 at 31/10/2024 - 10:06I agree that it’s unfair. Additional home SDLT really shouldn’t apply to rental properties in my opinion.
In fact, SDLT is unfair as tenants don’t pay it when they choose to move. Maybe they should in return for increased security of tenure under the RRB.
You could revise your offer for the property downwards.

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