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SDLT on Additional Residential Properties - Policy Paper Published

HMRC has today published its policy paper relating to higher SDLT (Stamp Duty Land Tax) rates on purchases of additional residential properties, such as 'buy to let' purchases and 'second homes'.

A higher rate of Stamp Duty was originally proposed in the Spending Review and Autumn Statement 2015, forming part of the government's Five Point Plan for housing, with a consultation then running between 28th December 2015 and 1 February 2016 before the final policy then came into force.

The new higher rate of stamp duty will be charged on purchases of additional residential properties from 1st April 2016, and will be three percentage points above the current SDLT rates.

Read our guide to SDLT rates for additional residential property purchases or read the full Policy Paper on the HMRC website.

Stamp Duty Rates for Second Homes and Buy to Let purchases

You must pay Stamp Duty Land Tax (SDLT) on any residential property where the purchase price is over £125,000.

If the property is being purchased as a second home or a buy to let property, or at the end of the day of the transaction, if you will own two or more residential properties and are not replacing a main residence, you will have to pay the higher rate of Stamp Duty Land Tax that are applicable on purchases of additional residential properties from 1st April 2016 onward.

You can use our Stamp Duty Calculator to find out how much SDLT you will have to pay on your additional property purchase.

Stamp Duty Rates for Additional Property Purchases

Property or lease premium or transfer value Old SDLT Rate New SDLT rate
Up to £40,000 Zero Zero
£40,000 - £125,000 (on the portion from £0 - £125,000) Zero 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% 5%
The next £675,000 (the portion from £250,001 to £925,000) 5% 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% 13%
The remaining amount (the portion above £1.5 million) 12% 15%


If you buy an additional property for £280,000, the SDLT you owe is calculated as follows:

3% on the first £125,000 = £3.750
5% on the next £125,000 = £6,250
8% on the final £30,000 = £2,400
Total SDLT = £12,400

Before April 1st 2016, the Stamp Duty payable would have been only £4,000, so the amount due has more than trebled.

You can read more about SDLT on residential property purchases in our help and advice section.

New Commercial Stamp Duty Rates Announced

In today's Budget, the Government has announced plans to charge no SDLT (Stamp Duty Land Tax) on commercial properties being purchased for £150,000 or less.

The rates will come into force at midnight, and apply to commercial property purchases from Thursday 17th March 2016 onwards - though transitional arrangements will be in place for purchases that are under way.

The treasury estimates that these changes will reduce the tax bill on around 90% of commercial property purchases, whilst also bringing in an extra £500m a year for the treasury, from the 9% of transactions it estimates will be affected by the higher rates.

The new SDLT rate will be zero for commercial property purchases up to £150,000, with a duty of 2% payable on the next £100,000 of the property value, rising to 5% for the remainder of the value over £250,000. See our commercial stamp duty rate table for further details.