Stamp duty on additional properties

stamp-duty

New rates of SDLT came into force on 1 April 2016. Although the rates straightforward to apply, there are some exceptions to be aware of. 

In this blog post we compare both standard and higher rates and how they apply to additional property purchases.

SDLT rates

Higher rates on purchases of additional properties are 3% on top of the standard SDLT rates. The following rates and thresholds apply from 1 April 2016:

 Portion of property price   Standard SDLT rates   Higher rates 
£0 - £125,000* 0% 3%
£125,001 - £250,000 2% 5%
£250,001 - £925,000 5% 8%
£925,001 - £1,500,000 10% 13%
Over £1,500,000 12% 15%

*Properties that are £40,000 or less are exempt from the higher rate.

What counts as additional property?

SDLT applies to additional purchases such as a second home or buy-to-let property. Certain properties such as caravans, mobile homes and houseboats are exempt from the SDLT surcharge.

If the property is replacing your main residence, you won’t need to pay the extra 3% SDLT. 

However, if you fail to sell your main residence before you complete your purchase, the higher rates will apply as you own 2 properties.

You may be able to claim the tax back if you sell your previous main residence within 3 years. The claim must be made 3 months of the sale.

Applying SDLT to your property

Here’s an example of a property purchase worth £275,000. The following SDLT rates and money owed will apply:

Standard SDLT rates

 Portion of property price   Rate   Cost
First £125,000 0% £0
Next £125,000 2% £2,500
Final £25,000 5% £1,250
Total SDLT to pay   £3,750

Higher SDLT rates

 Portion of property price   Rate   Cost
First £125,000 3% £3,750
Next £125,000 5% £6,250
Final £25,000 8% £2,000
Total SDLT to pay   £12,000

Use our SDLT calculator to work out how much stamp duty you need to pay on your second home or buy-to-let property.

Contact us

If there is a specific area you would like us to help you with, contact us by completing the form on our website. Alternatively you can call us on 020 8977 0905 (Hampton Wick Office) or 01932 855644 (Weybridge Office) to speak to an adviser.

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