The government cheekily chose a Bank Holiday Monday in the middle of the holiday season to launch a consultation into its scheme to charge an extra 3% stamp duty levy on second homes and buy-to-let properties.
And it’s a short consultation too: it’s due to close on 1st February, with Osborne prepping to reveal the policy’s full colours in his March Budget ahead of an anticipated April Fools’ Day activation date.
The surcharge – if it goes ahead in its current form – will apply to deals that complete on or after 1st April 2016 and if contracts are/were exchanged after 25th November.
- How to check if a purchase of a property by an individual is liable for the higher rates
- Proposed new SDLT rates
|Band||Existing residential SDLT rates||New additional property SDLT rates|
|£0 – £125k||0%||3%|
|£125k – £250k||2%||5%|
|£250k – £925k||5%||8%|
|£925k – £1.5m||10%||13%|
A fairly key part of this consultation will be clearing up what it means to “replace a main residence”; issues around shared ownership, marriages etc, buying for children, chunky investment plays and fallow periods between buying and selling all need clarification.
This bit is particularly worth noting…
Property owned and purchased outside of England, Wales and Northern Ireland
SDLT only applies to purchases of land and property in England, Wales and Northern Ireland. A purchase of residential property located outside these areas will not pay SDLT, instead it may be liable for any property transactions tax in that jurisdiction. However, property owned globally will be relevant in determining whether a property purchased in England, Wales or Northern Ireland is an additional property. This means that if someone is purchasing their first or only property in England, Wales or Northern Ireland, they may pay the higher rates if they own property outside these areas.
Check the full consultation document here