Stamp duty increase of 3% on additional properties

All to pay 3% increase on second homes and investment property says LLNH CEO Dominic Swinfield

The latest introduction of higher rates of stamp duty land tax (SDLT) on purchases of additional residential property above £40,000, such as on buy-to-let properties and or second homes.

The higher rates will be 3% above the current SDLT rates. For example, the zero or nil rate band will increase to 3% and the top slice of SDLT will increase to 15%.

Pricing Point                                               Current SDLT rate        Higher rate

Up to £40,000                                            0%                                    0%
Between £40,000 and £125,000            0%                                    3% *
Between £125,000 and £250,000          2%                                    5%
Between £250,000 and £925,000         5%                                    8%
Between £925,000 and £1,500,000      10%                                  13%
More than £1,500,000                              12%                                  15%

* This rate will also be charged on the first £40,000 of consideration.

Who will be affected?

The changes will affect both domestic and foreign purchasers of additional residential property in the UK (apart from Scotland) worth over £40,000, such as buy-to-let landlords and owners of second homes.

The higher rates will not apply to mobile caravans, mobile homes, or houseboats and the increased rates are not intended to apply to corporates and funds making significant investments in UK residential property.

When?

The higher rates will apply on purchases from 1 April 2016.

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