New rate of stamp duty land tax for second homes
From 1 April 2016, a supplementary rate of SDLT will apply to purchases of additional residential properties. This will cover second homes and buy-to-let properties and potentially other transactions.
The extra rate will be 3% and will apply as well as the current SDLT rates. The new rate will be based on the full purchase price for all purchases over £40,000. This rate will not apply if, following the purchase, the buyer will own only one residential property, irrespective of the intended use of the property.
The higher rates will not apply to caravans, mobile homes or houseboats or potentially to companies and individuals with portfolios in excess of 15 residential properties.
If at the completion of a transaction an individual owns two or more residential properties, whether he pays the higher rates or not will depend on whether he is replacing his main residential dwelling.
The Treasury recognises that there may be certain circumstances where purchasers have to pay the tax at completion but their circumstances then change. These people will be eligible for a refund of additional stamp duty land tax paid. This can be applied for up to 18 months after completion.We're here to help