From 1 April 2016 higher rates of stamp duty land tax (SDLT) on purchases of additional residential property above £40,000, such as on buy-to-let properties and second homes will be introduced. The higher rates will be 3% above the current SDLT rates. This means that the nil rate band will increase to 3% and the top rate of SDLT will increase to 15%.
The change will apply to both domestic and foreign purchasers of additional residential property in the UK (excluding Scotland) worth over £40,000, for example buy-to-let landlords and owners of second homes.
The higher rates will not apply to caravans, mobile homes, or houseboats and the increased rates will not apply to companies and investment funds making significant investments in UK residential property. However, policy has not yet been decided with regards the significant investments by companies as HMRC intend to consult on this aspect.