The Autumn Statement has revealed increased Stamp Duty Land Tax rates for second homes and buy to let properties.
From 1 April 2016, higher rates of SDLT will apply to the purchase of additional residential properties (such as second homes and buy-to-let properties) for chargeable consideration exceeding £40,000. We understand a consultation document providing more detail will be published shortly.
The higher rates will be 3% above the current SDLT rates for residential property. Therefore, the following SDLT rates will apply on acquisitions of these properties will be:
- £0 to £40,000: 0%
- £40,001 to £125,000: 3%.
- £125,001 to £250,000: 5%.
- £250,001 to £925,000: 8%.
- £925,001 to £1.5 million: 13%.
- Over £1.5 million: 15%.
Purchasers of additional residential properties will have to effectively opt in to the higher rates by declaring that the acquired property will not be their primary residence.
The increased rates will not apply to corporate or fund purchasers that make significant investments in residential property.The higher rates will also not apply to acquisitions of caravans, mobile home or houseboats.
Buy-to-let investors will pay thousands of pounds extra in tax when they buy a property following the announcement of special "landlord" stamp duty tax rates applying from April 2016.