Additional 3% SDLT charge
A reminder that the Additional 3% SDLT charge is now in place.
If you are planning the purchase of a UK residential property and you own another property at the time of the purchase, then you may need to consider whether or not you may be liable to the additional charge to Stamp Duty Land Tax (SDLT).
The additional 3% rate of SDLT for those purchasing ‘additional residential properties’ in England and Wales, such as second homes and buy-to-lets, is due to apply to completions from 1 April 2016, subject to some transitional relief (FB 2016 cl 117).
The increased SDLT rate will apply where, at the end of the day on which a property is acquired, the individual concerned owns two or more residential properties and is not replacing his or her main residence, which has been sold within the last 18 months.
Married couples and civil partners (unless they are separated in circumstances likely to be permanent) will be treated as a single unit for this purpose.
The 3% additional SDLT rate will also apply where an individual has sold their main residence and it takes them more than 36 months to complete the purchase of a new one, provided of course that the individual has more than one property at the end of the day the new property is acquired.
Where property is being purchased jointly, the additional 3% SDLT rate will apply to the entire value of the additional property if any of the joint owners already own a residential property.
In Scotland a supplementary transaction tax of 3% (now called the additional dwelling supplement (ADS)) will apply to second homes or buy-to-let properties.
The government have made a U-Turn with regard to the new tax being applied when a property is purchased with an annex, especially where the purchase is made to provide living accommodation for an elderly relative. More details can be found here:
Do contact us if you have any queries.