Higher rates of Stamp Duty Land Tax from April 2016

Consultation paper on the higher rates of SDLT for second properties

Following on from the announcement of the increase in stamp duty for the purchase of a second property, (see our previous article here) a consultation paper has now been released that puts a substantial amount of flesh on the bones of what was originally announced. It is a long read but is worthwhile so please click here to link through to it.

In brief if the new property purchased is not directly replacing an existing main residence then the higher rate of stamp duty is payable on the purchase price of the new property. The rates applicable to an ‘additional dwelling’ will be 3% higher than each of the existing residential rates. If you are buying a property to live in and selling at a later date, there is an 18 month period within which the sale can be completed and the additional stamp duty refunded. You will note that the stamp duty does need to be paid in the first instance.

You will also note that there is no exemption for parents buying properties for children if their name is on the title deeds and we assume that this will also apply to children buying for elderly relatives.

If you are buying a property and intend to let out your existing property, the higher level of stamp duty is payable on the new property irrespective of the fact that the property that you are purchasing is intended to become your main residence.

HMRC are not currently considering introducing an elective regime in relation to main residences as currently exists for Capital Gains Tax.

This consultation is not yet final but this update gives a pretty clear indication of the direction in which this is going. The only exemption currently being discussed is in relation to large scale property owners (currently defined as owning 15 properties or more). It appears likely that exemptions for people owning a lesser number of properties are going to be few and far between.

This has now been confirmed in the recent budget (click for guidence notes) of the 16th of April 2016. The full amount payable can be calculated using the HMRC Stamp Duty Calculator.

If you need further information on this or legal advice on buying or selling a property please contact:

Greg Begy, 01733 882800


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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.