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Land tax stamp duty changes April 2016

Higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties. The higher rates will be 3% above the current Stamp Duty Land Tax rates, and will take effect from 1 April 2016.

Everyone looking to move home or to purchase a buy to let property will need to consider this change. If you already own a property, including second homes and buy-to-lets, will have to pay an additional stamp duty if the purchase is more than £40,000.

The extra charge applies above the current “stamp duty land tax” rates. This means there will be 3% (currently zero) to pay on homes worth up to £125,000, 5% (instead of 2%) on homes that cost between £125,001 and £250,000 8% (currently 5%) on homes worth between £250,001 and £925,000. Homes worth up to £1.5m will be subject to 13% stamp duty and those over this amount will incur a 15% charge.

How to check if a purchase of a property by an individual is liable for the higher rates.Land tax stamp duty changes April 2016

Some good news if you pay the extra 3% stamp duty on a buy-to-let property, as the rules currently stand, investors will be able to offset the additional stamp duty, along with other purchase costs, against their capital gains on the property in the future. So even though it is an unwelcome extra upfront expense, a proportion can be clawed back eventually. But beware the Treasury could change the rules at any time.