Estate agents and accountants are investigating whether there are legal ways of circumnavigating the three per cent stamp duty surcharge that will be imposed on buy to let and second home purchases from April.
Charles Curran of Maskells Estate Agents says: “We will need to see the detail from HM Revenue and Customs before making our final analysis but our initial thoughts are for second homes, if you’re in a civil partnership or married, it is easy enough to buy a second property in the spouse or partner’s name. For example, if you spend the week in London and your spouse in the country, each property could be argued as being your primary residence.”
Frank Nash, a partner at London chartered accountancy firm Blick Rothenberg LLP, says: “It is going to be challenging to police the SLDT surcharge for second homes – a purchaser could easily declare the new home as their main residence immediately.”
Buying agent Henry Pryor has tweeted that 63,000 people live at two addresses in London, apparently splitting their time between homes in different boroughs. Using 2011 Census information, he also says some 229,803 people have a second home in the capital, and 39,827 homes are used by workers with their main residences elsewhere.
Edward Heaton, of buying agency Heaton and Partners, says: “What happens if someone who buys a new home, without having sold their existing one first? Are they liable to the three per cent surcharge”. What happens if you own a share in a small holiday home in Cornwall, and then buy a large house as your principle private residence in London or the south east? Will this be classified as a second home?”
Meanwhile law firm Mishcon de Reya says the devil is in the detail in terms of identifying how the tax will be applied.
Its post-statement verdict on the stamp duty bombshell says: “Given that SDLT on residential property is no longer based on a single fixed percentage of the entire price, the three per cent cannot simply be added to a single percentage. It appears that three per cent will therefore be added to the rate of tax on each ‘slice’, significantly increasing the SDLT due.”