Stamp Duty Land Tax on Additional Residential Properties

Written by Arnold Hill on November 17, 2016

New rules introducing higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties came into force on 1st April 2016. The higher rates are part of the Government’s plan to support home ownership and first time buyers.

The higher rates will only apply to purchases where the individual owns two or more properties at the end of the day of the transaction. However, if the previous main residence is sold within 18 months of the purchase of the new one, a refund will be available.

The higher rates of SDLT on additional property are 3 percentage points above the existing rates and they apply as follows:

Band SDLT Rates on Additional Properties
£0 – £125,000 3%
£125,000 – £250,000 5%
£250,000 – £925,000 8%
£925,000 – £1,500,000 13%
Above £1,500,000 15%

 Married Couples and Civil Partners

Married couples and civil partners are treated as one unit for SDLT purposes. Therefore, if either partner owns a property and a new joint property is bought, the higher rates will apply to the transaction.

Joint Purchasers

Similarly to married couples and civil partners, if any of the joint purchasers owns a property and is not replacing a main residence, the rates for additional property will apply to the transaction.

Properties under £40,000

Properties under £40,000 will not be taken into account when determining whether the higher rates of SDLT apply. For example, if a person owns a property worth less than £40,000, the purchase of an additional property will not be subject to the higher rates.

Inherited Properties

No SDLT is payable in respect of inherited properties however, any inherited properties will be relevant in determining if a person is purchasing an additional residential property.

If you have any questions, please get in contact.

The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.