Stamp duty land tax on annexes
When purchasing an additional property, buyers must pay a 3% Stamp Duty Land Tax (SDLT) surcharge. This applies to second homes and buy-to-let properties. However, concerns arose about how this surcharge affects properties with annexes.
The good news is that Stamp Duty Land Tax on annexes is not always subject to the extra charge. Specific conditions determine whether the second home supplement applies.
When Is the Extra SDLT Not Charged on Annexes?
The 3% surcharge does not apply if the annexe meets the following criteria:
- It cannot be sold separately from the main property.
- Its value is less than one-third of the total property value.
This means homeowners buying a main residence with a self-contained granny annexe may avoid the surcharge if these conditions are met.
Why This Matters for Homebuyers
Many buyers feared that having an annexe would trigger the second home surcharge. This exemption provides reassurance that properties with granny annexes are not unfairly penalised.
If an annexe is worth more than one-third of the total property price or can be sold separately, the surcharge may still apply. Buyers should assess their situation carefully before purchasing.
How We Can Help
Navigating Stamp Duty Land Tax on annexes can be complex. At Lewis Brownlee, we help buyers understand their tax liabilities and ensure they do not overpay SDLT. So, whether this is a matter of immediate concern, or something you are curious to learn more about, we can help. As leaders in the field, we have tax experts on site to help demystify Stamp Duty. We also offer a free introductory meeting for you to find out exactly how we can help. So, when you’re ready, we’re ready. Book your free meeting today and let’s see how we can partner in your success!
If you need guidance on stamp duty or property tax planning, contact us today. Our experts are here to help.