What does the 3% Stamp Duty Land Tax rate hike on additional properties mean for you?

Posted by John Shallcross on

The Chancellor's Autumn Statement was full of optimism and wide sweeping declarations about a greater United Kingdom, but the picture on Stamp Duty Land Tax is not all sunshine and roses. George Osborne announced this afternoon that from April 2016, SDLT will be increased by 3% on residential buy-to-lets and second homes and will start for properties bought for more than £40,000. The top bracket of SDLT will therefore rise from 12% to 15%. This, coupled with the unfavourable changes to the deductibility for interest and 10% wear and tear for income tax purposes announced during the Summer Budget, firmly solidifies the government's crackdown on investments in the residential property domain.

There is to be consultation as to whether corporates and funds with more than 15 properties will be exempted from the higher rates.

Although a formal consultation will be undertaken at a time to be confirmed, a number of questions have already arisen, such as the definition of "residential". Does a farmhouse with substantial paddocks count as residential? There is also speculation that the change in rates will create pressure to complete property purchases before the 1 April 2016 deadline.

If you have any questions in relation to the recent SDLT changes made in the Autumn Statement 2015 or otherwise, please contact our SDLT specialist, John Shallcross, on the information below.

About the Authors

Photograph of John Shallcross

John is an experienced real estate Lawyer with a background in agricultural and landed estate property work. He has also developed a specialisation as an adviser on the stamp duty land tax implications of property transactions.

John Shallcross
Email John
023 8085 7469

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Photograph of Elysa Jacobs

Elysa is a private client Solicitor based in London. She specialises in Succession & Tax, Wills and Estate Planning, Inheritance Tax, Trusts and the administration of estates.

Elysa Jacobs
Email Elysa
020 7014 5243

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