When buying a new secondary home, many buyers are unprepared for the additional costs when buying a new second home. In the case of a house, that can be anything from planning and solicitor fees to VAT. Suppose you’re considering buying a second or holiday home in the United Kingdom. In that case, you may have to factor in additional taxes like SDLT (Stamp Duty Land Tax), depending on the property you are looking to buy. Read on to know more about stamp duty rates on second homes.
Speak with one of our friendly experts and find out how we can help you save tax, reduce admin and file with HMRC.
Invalid value
Submitting your details indicates that you are happy for dns to contact you about relevant services and offers. You can unsubscribe at any time.
Stamp Duty is a tax charged on transfers of certain real estate property types. The amount of duty is calculated based on the value of the property. While the government once collected this tax on paper with actual stamps, the term now refers to a property tax. It is one of the most common taxes in the world and is calculated as a percentage of the property’s value.
If you are buying a second home, you may have to pay SDLT - Stamp Duty Land Tax at the higher rate of 15%. The usual rate for buying a second home is 3%. The rates for purchasing a first home are still zero. It is important to note that the exemption on SDLT for first-time buyers is still in place. This means first-time buyers buying a property worth less than £425,000 do not have to pay any SDLT. For example, if you are planning to buy a home worth £500,000 and have not bought a property before, then you will have to pay £3,750 as SDLT. What if you have already purchased a property and are now looking to buy a second home? In that case, the current rules say that you will have to pay a higher tax rate even if you have not made any profit on the first property. You need to see if you have paid the right amount at the right time. If you paid a higher amount of tax, you can check online or approach a tax advisor to see if any change needs to be made and How do I get my SDLT refund?.
Stamp Duty: If you buy a property, you will have to pay SDLT. The rate of tax depends on the value of the property. - Buyers’ Stamp Duty Relief: If you are a first-time buyer buying a property worth less than £625,000, you may qualify for Buyers’ SDLT Relief, which means you will not have to pay any SDLT on the property. Note that this is not the same as the First Time Buyers’ Mortgage Scheme, a government-backed scheme that helps people who have no funds in the bank to buy a house. You can check online or approach a tax advisor to see if you qualify for any relief. - Tax on your income: When you invest in property, you earn an income. You have to pay income tax on that income and pay National Insurance. You may also have to pay Local Tax on that income.
The buying process of a second home is not any different than the buying process of a first home. There are a few things that you should know about the taxes on second homes and SDLT relief on second property before you apply for a mortgage. The best way to see if you are ready to buy a second home is to know your budget and credit score and make sure you can save for a down payment.
Get the best advice on tax savings, accounting services, payroll, self assessment, VAT and more, whether you want to call us directly, request a call back or chat online with our experts, rest assured that we will always give you the best advice.If you have any questions, or would like to speak to us in person, please do get in touch. We're here to help.
dns accountants DNS House, 382 Kenton Road, Harrow, Middlesex, HA3 8DP
0333 060 2437
info@dnsaccountants.co.uk
We're proud of our clients and their success. Find out more about them andthe help and support we provide.
“I recently started my own company and in need of a good accountant. With my friends reference, I started dns accountancy services and I am a quite satisfied with their service. My account manager Sneha Gurudutta was always responsive and guided me a lot especially during my company early days. Keep u the good work.”
“I have been dns for the last 3 months and I am very happy with the service. My account manager Sneha Gurudutta guided me and helped me with all the major/minor steps with the account setup. The weekend support they provide is really helpful. I would definitely recommend dns to all my friends.”
“Unfortunately my son passed away without leaving any contact name of his accountant. I was able to make contact with the firm through HMRC. The staff were very prompt, caring and supportive in settling his income tax account. I was extremely impressed with the efficient caring and supportive service received from all of dns staff.”
“Been with dns Accountants for more than a year I would highly recommened their services. My account manager Sneha has been very helpful and helped with accounts and queries swiftly always! Having a good accountant means you can fully focus on your business, not worry about accounts and tax matters. Thank you dns :-)”
“I have been extremely satisfied with the service I have been receiving close to past 1 year. Very professional, transparent and helpful. Special mention of my Account Manager Minakshi Arora who made my transition very smooth and always ready to go that extra mile to support and make customer happy. Definitely recommended.”
“I've recently set up a Ltd. Company and signed up with dns for my accounting services. I've found it very good value for money and hugely helpful in terms of advice and guidance. I have a named Account Manager, Sneha Gurudutta, who keeps in contact with me and offers advice on line and on the phone... I'm really pleased with the service.”
Limited time only!
Say Goodbye to Bookkeeping Hassles: Nomi offers Free Receipt Processing and big savings!
Small Business
Business Start Up
Contractors
Freelancers
Landlords
Sole Trader
Construction Industry
Accounting
Bookkeeping
Payroll/Auto enrolment
Self-Assessment
VAT Returns
Year End Accounts
Accounting Software
Tax Advisory
Find a Professional
Business Recovery & Company Closures
IR35 Review
R & D Tax Credit
Seed Enterprise Investment Scheme (EIS/SEIS)
Tax Planning
Special Purpose Vehicle SPV
Corporate Advisory
Business Support Services
Business Insurance
Business Plan
Management Accounts
Company Formation
Tax Investigation Cover
Free accounting software
Our Story
Achievements
Charities
Blogs
Webinars
Newsletters