Stamp Duty for Life Tenancies
As of the March 2016 Budget, Life Tenancy investments are exempt from the increased Stamp Duty tax levied against additional residential properties. This is because you are purchasing a property with a Lifetime Owner living there for an undefined period of time. The Lifetime Lease, which the Lifetime Owner has purchased, is over 21 years in length thus exempt from the increased Stamp Duty. Essentially, you are unable to use that property as a second home or rental property for quite some time.
As the investor, you will only pay the standard rate of Stamp Duty if your investment is in excess of £125,000, as you would if you were purchasing a property to live in. And unsurprisingly, with such high discounts against the RICS valuation, many of our available investments fall short of the Stamp Duty threshold. Fantastic news for those who have already purchased Life Tenancies as part of their investment strategy and especially good for those who have been contemplating adding Life Tenancies to their portfolios.
And it’s not just savings on Stamp Duty. All Life Tenancy investments are available to buy, on average, at 47% below the RICS valuation. Read more about the discount here.