My son and his Australian girlfriend are in the process of buying their first flat together. Up until now they have both lived in rental accommodation; he is a first time buyer and she has a flat in Australia which she rents out. Why do they have to pay the higher rate of stamp duty, since the new flat is going to be their main residence?
The rules on stamp duty are designed not to penalise people who already own second homes but simply want to move house. Because the couple are currently renting, their new flat to all intents and purposes will be a second home, since one of them already owns another residential property. So they are likely to be liable to pay the new stamp duty rates.