Stamp Duty (SDLT) charges are changing for purchases of additional residential properties in England, Wales and Northern Ireland completing on or after 1 April 2016.

An ‘Additional Residential Property’ could be a Buy to Let, a Holiday Home or a property purchased for the purchasers children etc.

Purchase Price Band Stamp Duty charge up until 31st March 2016 Completions on or after 1st April 2016
£0* – £125k 0% 3%
£125k – £250k 2% 5%
£250k – £925k 5% 8%
£925k – £1.5m 10% 13%
£1.5m + 12% 15%

 

To calculate the amount of SDLT to pay:

Example 1:

An additional residential property is purchased for £200,000. SDLT is calculated as follows:

3% on the first £125,000 = £3,750

5% on the remaining £75,000 (the portion between £125,000 and £200,000) = £3,750

The total SDLT due is therefore: £3,750 + £3,750 = £7,500

Example 2:

An additional residential property is purchased for £100,000. SDLT is calculated as follows:

3% on £100,000 = £3,000.

NB: The higher rates will not apply if at the end of the day of the transaction an individual owns only one residential property, irrespective of the intended use of the property.

The following flow diagram from the Government explains whether a purchaser will be required to pay the new higher rate of SDLT for their property transaction:

SDLT-diagram

Source: https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

For more information and exemptions to this new higher rate of SDLT can be found using the following link: https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties