Divorcing couples should no longer run the risk of inflated stamp duties when buying property, following this week budget.
Chancellor Philip Hammond announced plans to close a loophole which had seen couples going through a divorce frequently penalised by a three per cent surcharge on second homes, a measure which had been intended to rein in buy-to-let landlords when it came into force in April 2016. The extra charge could double the stamp duty payable for some properties.
Unfortunately for divorcing couples, if one partner continued to live in the former matrimonial home, any property purchased by either party before the decree nisi would count as a cost-inflating second home, and therefore be subject to the increased rate.
But it should no longer affect divorcing couples following this week’s announcement. However, The Telegraph reports, the wording used in budget documents has caused concern by suggesting that only couples with a court order will be exempted from the higher rate, but not who reach settlement agreements between themselves.
Image by Sarah Joy via Flickr under a Creative Commons licence
I’m very confused… in the Q&A section of the official guidance notes, the following is stated.
Q11. I previously bought a house jointly with my spouse/partner. The relationship has broken down so can I be treated as a first time buyer?
A11. No. Where a person has previously acquired an interest in a dwelling as a joint tenant or a tenant in common, that person is not a first time buyer.