Beware when buying a house in the UK. If you already own a house elsewhere in the world, you are likely to have to pay an additional 3% SDLT.
If you are buying your new house intended to be your only home, you could still get caught having to pay the extra 3% SDLT on part if there is a secondary house that comes with the main house.
There has recently been an amendment to the Finance Act (Clause 117) to try to clarify this.
Where there is a second house or accommodation within the principal house, SDLT at the increased rate will not apply on the secondary property if –
- They are purchased as a single transaction.
- They are within the same building or in the same grounds.
- The principal dwelling is at least two thirds of the value of all the purchased dwellings within the grounds.
There are grey areas with respect to what constitutes “grounds” and additional work for valuers and agents in the respect of two-thirds of the value!
Properties that qualify for “mixed use”, no matter how many dwellings, still only attract SDLT at the reduced rate of 5% even if this is an additional home.
As always, good professional advice at all stages is critical and can save time, money and an awful lot of complication.