From 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will be payable on the purchase of additional residential properties (such as second homes and buy-to-let properties) for chargeable consideration exceeding £40,000.
These higher rates will be 3% above the current SDLT rates for residential property. Therefore, the following SDLT rates will apply on a progressive basis to acquisitions of such residential property:
£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.
For further information on the current SDLT rates for residential property, which will continue to apply to the purchase of first homes occupied by buyers then please call the team at Silks on 0121 511 2233.