SDLT rate rise for buy-to-let properties and second homes

Flat-pack houses Stamp Duty Land Tax (SDLT) will rise by 3% for most buy-to-let investors and purchasers of second homes from 1 April 2016.

This means that even those buying modestly-priced second properties or buy-to-lets will pay thousands more in SDLT. For example, someone buying a buy-to-let or second property for £150,000, who would currently pay £500 in SDLT, would pay £5,000 in SDLT from 1 April.

Under the changes, a residential property purchased as a second home or buy-to-let investment for over £40,000 will attract 3% more than the current SDLT rate. The SDLT rate rises progressively according to the property’s purchase price. With the 3% increase, the following SDLT rates will apply for buy-to-let properties and second homes from April 2016: 

  • Up to £125,000: 3%
  • £125,000.01 to £250,000: 5%
  • £250,000.01 to £925,000: 8%
  • £925,000.01 to £1,500,000: 13%
  • Over £1,500,000: 15%

The rate increase will not apply to caravan, mobile home or houseboat purchases. Nor will it apply to corporate or fund purchasers that invest significantly in residential property. The government will consult on whether the ownership of more than 15 residential properties will constitute a ‘significant investment’ for these purposes.

A further blow to buy-to-let investors is the announcement that from April 2019 Capital Gains Tax (CGT) will need to be paid within 30 days of selling a residential property. Currently this is paid at the end of the tax year via a seller’s annual return.

Legal advice on investment property

For expert advice on all aspects of investment property contact Gaby Hardwicke Senior Associate Solicitor Melanie Verth on 01323 435 900 or .

Posted: 07 December 2015

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