Now that the 31st March deadline has passed, the increase of 3% on all second home purchases is an unavoidable reality. The hiatus created in the rush to exchange contracts before the deadline is finished and the market will have to find a new reality. 3% is a lot at any price level, but particularly on property priced in excess of £1m & £1.5m where the level of duty is already 10% & 12% respectively.
It also throws up other questions that are not yet answered. For example under the old rules, if your property included a second or third dwelling, then the purchase price could be averaged and Stamp Duty paid at the average rate, albeit by the number of properties. Now the Lodge, cottage or flat is a second home, so may attract a 3% premium.
It makes it all the more important to fully explore the “mixed use” route which covers farms, Estates and multiple use properties and where the rate is a mere 4%. If you have a paddock, do not just put horses on it, because they do not count as agriculture – put some sheep or cattle on it with the horses, and take photographs as evidence. Or, better still, claim your rural payments, if you are entitled to.