Changes to Stamp Duty Land Tax rates for Buy-to-Let properties and second homes
As a result of the Chancellor’s Autumn statement, the rates of Stamp Duty Land Tax (SDLT) for Buy-to-let (BTL) and 2nd properties will increase by 3% from 1st April 2016.
Below is a table of the new rates. Please note these only extend to residential properties, not commercial ones.
As well as having a knock on effect for those buying BTLs, this will also have an effect on those people whose parents may have transferred their home to them, and they then seek to purchase another property. The new property may be treated as a second property for SDLT purposes, unless they can prove that it is being purchased as a main residence.
The higher rates will not affect transactions with a purchase price of up to £40,000 where a SDLT return is not required. The changes will also not apply to the purchase of a main residence or to corporates and funds making significant investments in residential property.
The higher rates will be an additional 3% to the existing SDLT rates. The current rates and new rates of SDLT for additional residential property purchases are:
| Band | Existing SDLT rates | New additional SDLT rates |
| *£0 – £125k | 0% | 3% |
| £125k – £250k | 2% | 5% |
| £250k – £925k | 5% | 8% |
| £925k – £1.5m | 10% | 13% |
| £1.5m + | 12% | 15% |
*Only applies to purchases over £40,000. For purchases at £40,000 or under no SDLT return is required.
