SDLT on the Acquisition of Additional Properties

It is important to note that from 1 April 2016 higher rates of stamp duty land tax (SDLT) will be applied to additional residential property purchases above £40,000. Announced as part of the government’s 2015 Autumn Spending Review, this will raise SDLT rates to 3% higher than they currently stand.

This will apply to:

  • Buy-to-let properties
  • Second homes.

This will not apply to:

  • Purchases of caravans, mobile homes or houseboats
  • Corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.

The government is due to consult whether exemption is appropriate in the case of corporates and funds owning more than 15 properties.

Changes to the filing and payment process

The government is due to consult on changes to the filing and payment process. This includes a proposed reduction in the filing and payment window from 30 to 14 days. Any changes are due to take effect from 2017-18.

Changes relating to ATED and 15% higher rate SDLT

Reliefs available from Annual Tax on Enveloped Dwellings (ATED) and the 15% higher rate of SDLT:

  • From 1 April 2016 these reliefs will be extended to equity release schemes (home reversion plans), property development activities and properties occupied by employees.

Changes to SDLT and authorised property funds

A seeding relief will be introduced for:

    • Property Authorised Investment Funds (PAIFs)
    • Co-ownership Authorised Contractual Schemes (CoACSs)
    • Changes made to the SDLT treatment of CoACSs investing in property

This blog post is only a brief summary of the SDLT changes. For more information on how this could affect you, please get in touch with us.