Purchasing a holiday home? Here is what the latest Stamp Duty changes mean for you

Purchasing a holiday home is an exciting prospect, but recent changes to Stamp Duty Land Tax (SDLT) mean careful planning is more important than ever.

As of 31 October 2024, the Higher Rates for Additional Dwellings (HRAD) surcharge on SDLT has increased from three per cent to five per cent.

This surcharge applies to anyone purchasing a second home, buy-to-let property, or other additional residential property.

Assessing the legal implications of increased SDLT costs

The SDLT surcharge increase directly impacts the total cost of purchasing a holiday home.

For instance, if you are buying a property priced at £300,000, the HRAD surcharge would now be £15,000, up from £9,000.

Beyond the financial aspect, understanding how this surcharge applies to you and managing SDLT filing requirements will help you avoid any legal penalties.

The surcharge rules can be complex, especially if you already own other properties or plan to transfer ownership within your family or a trust.

For instance, if you are married and your spouse already owns a primary residence, the HRAD surcharge will likely apply to your holiday home purchase, even if your name is not on the title of the primary residence.

There are also specific filing deadlines for submitting the SDLT return and paying the tax, typically 14 days after completion.

Our solicitors can assist in completing and filing your SDLT return correctly and on time, and help you evaluate any potential exemptions or reliefs based on your unique circumstances.

Selecting the right ownership structure

If you are purchasing a holiday home with a partner or family member, the ownership structure you choose will have legal consequences.

Opting for joint ownership or tenancy in common each carries distinct legal implications.

We can help avoid conflicts, ensure your interests are protected, and create clarity around your property rights.

Contact us today to discuss how we can make your holiday home purchase a legally sound and seamless experience.