Buying a property with an eye to future gains is always a safe bet. But beware the pitfalls of incorrectly assessed Stamp Duty and the thousands it could cost you.
Property is one of the safest investments. Solid, dependable, and mostly unlikely to take big dips in value. With the rental market extremely healthy, it’s also a good way to generate a second income.
You’ve likely consulted an accountant on the tax implications of your investment, but you probably didn’t spend too much time on Stamp Duty.
In 2016 when the ‘3% surcharge’ was introduced as a way to free up smaller properties at the lower end of the market and encourage first time buyers, it wasn’t really very clear to anyone exactly how it would work.
Many solicitors got it wrong – either asking to pay large additional amounts of Stamp Duty which were not due, or asking after exchange for surcharges which were due but hadn’t been picked up on before.
The surcharge is just one of the many complexities which apply to the purchase of investment properties. Investment property is often bought in multiples – a block of flats or a converted building with different titles – which means Multiple Dwellings Relief may apply, if anyone bothers to check. The property may be mixed-use, which again may impact the amounts due.
When you’re trying to make money out of property, the last thing you want to risk is paying the wrong amount of tax, or worse, overpaying that tax by tens, or even hundreds of thousands of pounds.
As a property investor, the buck stops with you (literally, as Stamp Duty is a self-assessed personal tax levied against the individual). Doesn’t it make sense to find an expert to advise you on it and make sure you get it right?
If you’re a homebuyer, solicitor or agent and require pre or post-transactional advice then please contact us and one of our property tax advisors will be delighted to help.contact Us
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