You may well have seen the Direct Line landlord insurance advert, you know; the one with the mafia-ish guy, “Prize plum…goes well with magnolia”.
Well the bigger problem for this guy is when he comes to move house. The apparently inoffensive comment “it’s just my wife’s old flat” is the killer. That means that under the new stamp duty rules if the couple buy a new (probably bigger) house it could be classed as a second home and liable to an extra 3% tax on the full value (that’s on top of the usual stamp duty payable); Ouch!!
Of course, they will be hit with this on buying a rental property if they already have a home but usually these are cheaper then a main family home so will attract a smaller bill.
The moral is to be very careful when buying property as it’s easy to fall foul of the new rules without meaning to. They also apply if you live abroad and buy in the UK.
Make sure you get advice as property solicitors don’t always think of the tax consequences and the cost of getting it wrong could make a horse’s head in the bed seem like the better option.
Have a great weekend
Paul