From 1st April 2016, if you are purchasing additional residential properties in England, Wales and Northern Ireland, you will need to pay an additional 3% above the current stamp duty land tax (SDLT) residential rates. This includes second homes, holiday homes and buy-to-let properties.
Freehold sales and transfers:
| Property or lease premium or transfer value | SDLT rate | Higher SDLT Rate |
|---|---|---|
| Up to £125,000 | Zero | 3% |
| £125,001 to £250,000 | 2% | 5% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5 million | 10% | 13% |
| Over £1.5 million | 12% | 15% |
You also need to be aware that you could get caught out by this if you buy and sell your residential home at different dates (ie you don’t complete both transactions on the same date)
The Higher Rate of SDLT will apply if at the end of the day of the transaction an individual purchaser owns two or more residential properties (either because they have not sold a previous main residence within the last 18 months or the property being acquired is not a new main residence), the higher rates will apply.
If you sell the previous main residence within 18 months, then a refund of the additional stamp duty will be available.
In Scotland, Land and Buildings Transaction Tax (LBTT) applies. The rates are slightly different compared to Stamp Duty Land Tax, however, the 3% additional tax charge will still apply.
| Purchase Price | LBTT Rate | Higher LBTT Rate |
|---|---|---|
| Up to £145,000 | Zero | 3% * |
| £145,001 to £250,000 | 2% | 5% |
| £250,001 to £325,000 | 5% | 8% |
| £325,001 to £750,000 | 10% | 13% |
| Over £750,000 | 12% | 15% |
* The additional rate does not apply to homes bought for less that £40,000 in Scotland