The Autumn Statement 2015 revealed from April 2016 higher rates of Stamp Duty Land Tax (SDLT) will be charged on purchases of additional residential properties. The surcharge will lift each tax band by 3%, this means for properties falling between the £125,000-£250,000 band, SDLT will be charged at 5% as oppose to the usual 2%.
| Stamp Duty Rates (on purchases) | ||
| Property value | Standard rate | Buy-to-let/second home rate (April 2016) |
| Up to £125,000 | 0% | 3% |
| £125 – £250,000 | 2% | 5% |
| £250 – £925,000 | 5% | 8% |
| £925 – £1.5m | 10% | 13% |
| over £1.5m | 12% | 15% |
In particular the changes will apply to second homes and buy to let properties; excluding purchases of caravans, mobile homes, boathouses or transactions under £40,000.
It has been suggested specific exemptions may apply to property investors with more than 15 properties; however this is yet to be confirmed.
It is worth nothing any matters which are due to complete prior to April 2016 will not be affected by the changes. Moreover, the surcharge will not be applied to Contracts entered into before 26 November 2015 which are due to complete on or after 1 April 2016; subject to no variations of the contract being made after 26 November 2016.
If you are looking at selling or buying a property and require lgeal assistance then please do not hesitate to contact us via our website www.hinesolicitors.com or on 01494 685588.
