From 1 April 2016, new SDLT rates will apply to the purchase of ‘additional residential properties’.
Further to an announcement made at the 2015 Autumn Statement, a short consultation exercise has started on the introduction of a stamp duty land tax (SDLT) surcharge that will apply to purchases of additional residential properties such as buy-to-let properties and second homes. The surcharge – an additional three percentage points on each of the existing rates – is part of a scheme of measures aimed at supporting low-cost home ownership for first-time buyers. The surcharge will apply to most purchases of additional residential properties in England, Wales and Northern Ireland (equivalent measures will apply to land and buildings transaction tax in Scotland) where, at the end of the day of the transaction, the purchaser owns two or more residential properties and one of those properties has not replaced his or her previous main residence.
Where the surcharge applies and the previous main residence is sold within 18 months, the surcharge can be reclaimed, provided that the property purchased will become the purchaser’s main residence.
The Government proposes to introduce a limited exemption for large-scale investors only. The surcharge will, under the current proposal, apply to developers, traders and investors owning less than 15 residential properties.
The consultation will end on 1 February 2016 and the final design of the new rules will be announced at the Budget on 16 March 2016. If you have any comments that you would like considered as part of KPMG’s response to the consultation, we would be delighted to hear from you.
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