The United Kingdom’s most recent stamp duty updates have two consequences. One is that this is the first-time homeowners are lured into buying property through tax cuts. The second is that those who already own a house and are considering purchasing another will have to decide whether to pursue their plans and pay for additional taxes.
If you belong to the second demographic, you might be glad to know that there are loopholes in these newly-introduced tax laws which you can use to circumvent the hike of stamp duty rates.
Split stamp duty between seller and buyer.
Property sales have seen a considerable decline after the introduction of these new calculations of stamp duty rates. If you are a house seller, you can expect to have your property on the market longer than usual.
This is where the situation becomes beneficial if you are a buyer. Negotiating with your seller to split the stamp duty could be a win-win situation. The seller can profit from his property quickly. If you are a buyer, you can have some savings.
Buy your child a property bound to a formal trust.
If you are relatively wealthy, the best option for you to avoid these tax hikes is to buy your grown-up children property. This will not be considered your second home and will not be subject to the new rules.
But if you are a little wary about entrusting such asset to a young adult, you can always choose a form of trust with the help of your conveyancing lawyer. This way you can name control.
Should you decide to maximise these two strategies, be sure to calculate stamp duty accurately a property under your children’s name but remain in real time before you make any deals. In these times of fluctuating policies, it is always better you stay proactive.