The government has announced its proposal that a higher rate of Stamp Duty Land Tax (SDLT) will be charged on purchases of additional residential properties (such as buy-to-let properties and second homes) above £40,000 from 1st April 2016.
This higher rate will be 3% above the current SDLT rate payable. There are limited exceptions, the higher rates not being applicable to the purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property (due to the role that this type of investment plays in supporting the government’s housing agenda).
During the course of this year the government are running a consultation process looking into the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate. Further consultation is talking place on the proposed changes to the SDLT filing and payment process, including a reduction in the filing and payment window from 30 days to 14 days. These changes are scheduled to come into effect in 2017 to 2018.
Anyone considered purchasing additional residential properties should consider their tax position now. Please do not hesitate to contact a member of our team for further assistance.