Stamp Duty Land Tax – Changes for Additional Residential Properties – The Basics
Stamp Duty Land Tax – Changes for Additional Residential Properties – The Basics
If you are considering purchasing a second home or purchasing a property to let, then as from the 1st April 2016, you may be subject to paying a higher rate of stamp duty land tax (SDLT).
There are transitional rules in place and the higher rate payable will not apply if a contract was entered into before the 26th November 2015 and where completion of the purchase takes place after the 1 April 2016. The new rates will not apply to corporate or fund purchasers that make significant residential property investments. Consultation is taking place to consider whether the ownership of 15 residential properties can be classed as “significant investment”.
When making such a purchase, you will need to declare to your Solicitor/Licensed Conveyancer that you are acquiring the property as a second home or buy to let in order that you are given the correct details for SDLT payable.
At present, if you purchase an additional home up to the sum of £125,000, stamp duty land tax is not payable. Under the new stamp duty rates, you would be subject to payment of stamp duty at 3% on this purchase price.
The rate of stamp duty land tax payable is subject to staircasing as follows:-
£0 to £125k – 3%
£125k - £250k – 5%
£250k - £925k – 8%
£925k - £1.5m – 13%
£1.5m plus – 15%
As an example if you purchase an additional home for £350,000, the first £125k would be subject to 3% SDLT, the next £125k would be subject to 5% SDLT and the final £100k would be subject to 8% SDLT.
For legal advice in relation to Stamp Duty Land Tax and purchasing a second home or buy to let property or other property matters, please contact either Mark Shepherd or Sally Stainton on 01664 536162. Alternatively email .(JavaScript must be enabled to view this email address) or .(JavaScript must be enabled to view this email address)
Oldham Marsh Page Flavell are Solicitors in Melton Mowbray.
