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Stamp Duty ‘Loophole’ Revealed by the Treasury

The Treasury has revealed that, in spite of the upcoming Stamp Duty Land Tax, large-scale property investors may be able to offset some of the duty on multiple purchases.

UK Stamp Duty Reforms

The Treasury has revealed that, in spite of the upcoming Stamp Duty Land Tax, large-scale property investors may be able to offset some of the duty on multiple purchases.

Following the lengthy consultation process on the new levy announced in last November’s Autumn Statement, the Treasury has provided clarification of the new rules for those who entered their feedback during this process.


In an email to these respondents, the Treasury confirmed that an existing piece of legislation – known as Multiple Dwelling Relief – will still be applicable to purchases, allowing purchasers of six or more properties to potentially claim some of the new levy back from the government.


The Multiple Dwelling Relief allows those purchasing multiple properties to use a calculation in order to reduce the amount of tax applicable to their property purchases.


According to the guidelines listed on the government’s website, the way this is calculated is by dividing the total amount paid for the properties by the number of dwellings that are being purchased. The investor must then calculate the amount tax applicable to this figure before multiplying this rate by the number of dwellings.


Whilst the additional 3% levy will still be applicable on top of this figure, the announcement from the Treasury has come as good news to larger investors.


Last week, Chancellor George Osborne specifically singled out larger investors during his Budget speech, stating that the new surcharge would now be applicable to these investors, despite the Autumn Statement initially stating that this group would be exempt from the tax.


The new 3% surcharge on the purchase of second homes or buy-to-let properties is due to come into operation next week from April 1st.

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