Major finance company joins call for stamp duty reform
Royal London says it is making the call because of the risk of “severe financial hardship” being caused by the complexity of the current stamp duty regime.
It says new HMRC figures show that stamp duty rules designed to clamp down on buy-to-let landlords have landed ordinary homebuyers with unexpected tax bills totalling over £160m which have then had to be refunded.
The three per cent stamp duty surcharge was introduced in April 2016 for those purchasing properties in addition to their main residence.
While the tax was introduced to cool down the buy-to-let market, Royal London says there is potential for people who aim to sell their current main residence and purchase a new one to fall foul of the tax.
For instance if someone purchasing a new property found that the sale of the home they wish to leave has fallen through they would find themselves having to pay the higher rates of tax because they effectively own two properties.
The size of the bills received can be considerable. Someone purchasing an average priced property (£320,168) in the South East could find themselves having to pay £15,613 in higher rate Stamp duty when they were expecting a stamp duty bill of £6,008.
Similarly someone purchasing a property in North East England (£130,000) could find themselves facing higher rate of duty of about £4,000.
Kindly shared by EstateAgentTODAY