By Bea Patel, TLE Property Editor and Director of Shop for an Agent
The new three per cent stamp duty land tax (SDLT) levy on top of the current standard rate hit homebuyers on 1 April 2016. Announced in Chancellor George Osborne’s 2015 Autumn statement, it affects domestic and foreign buyers of second residential homes in the UK over £40,000. Caravans, mobile homes and houseboats are exempt and there is no charge on inherited properties.
With limited supply, high rents and a spike in property prices, first-time buyers are priced out of the market. The introduction of the additional SDLT is part of the Government’s aim to make homeownership easier for first-time buyers, by cooling the buy-to-let market.
Now, if you buy or part buy a buy-to-let investment, second home or holiday home in England, Wales or Northern Ireland, you’ll pay an additional three per cent SDLT in additional to the standard rate charge based on the value of your property. You’ll also pay if you buy a property with a spouse/civil partner and one of you already owns a property. The Government will treat married couples and civil partners as one unit.
The additional SDLT doesn’t apply if you’re replacing your main residence (regardless of how many properties you own), as long as you sell your previous main residence within 36 months (previously 18 months) of buying your new residence. You’ll have to pay the SDLT levy if you haven’t sold your previous property before you buy your new one, but HMRC will refund you.
The table below shows how much you’ll pay under the new rules.
*Properties below £40,000 are exempt from SDLT payments.