Law Society warning over 3% stamp duty increase
By Monidipa Fouzder » Higher rates of stamp duty for second homes due to come into effect on 1 April pose problems for solicitors, the Law Society has warned. In last year’s autumn statement, the government announced a surcharge of 3% of stamp duty land tax on purchases of additional homes. However, solicitors have questioned how people liable for the new rate would be identified. The Society has proposed a single test at the point of purchase of whether the property is being purchased as the main residence. Married couples and civil partners should not be treated as a ‘single unit’, the Society said, ‘as the principle of independent taxation dictates that you should look at the individual’s tax position’. It said the policy potentially penalises individuals who already have an investment property and want to buy a main residence. The Society said the 18-month grace period between selling a main residence and buying a new one was not long enough. It also questioned the basis for exempting purchasers who owned at least 15 residential properties: ‘We wonder what analysis has been done as to the impact of this on the market or whether this is (as we largely suspect) a finger in the air.’ Meanwhile, the Conveyancing Association said an unintended consequence of the tax might be to turn solicitors into a police force. The association said it was important that conveyancers ‘are not held responsible for determining when an individual already owns a main residence, and that the individual purchaser themselves be responsible for providing the correct information, which is to be relied upon by all parties’. Final details of the tax change will be announced in the March budget.
[Courtesy – The Law Society Gazette]