Higher Rate of SDLT on additional properties

Higher Rates on additional properties

Higher rates of Stamp Duty Land Tax (SDLT) apply to purchases of additional residential properties - the rates for additional properties are 5% higher than they are for the purchase of first or main residences. In both cases, SDLT is charged on the portion of the value of the property that falls into each band (the same method used for income tax). 

A full explanation can be found on the government website.

Frequently Asked Questions

I'm helping my child buy their first property - do the higher rates apply to them?

No - provided the property is purchased in their name and it is their first property the lower rates of SDLT apply (regardless of the fact that you might have given them money to help with the deposit or acted as guarantor to their mortgage). However, it's important that the property is exclusively in their name  - if it is owned by you for their benefit or owned by you both jointly then the higher rate of SDLT would apply.

I am moving but have not yet sold my main residence - do the higher rates apply to me?

Yes - the purchase of an additional property will attract the higher rates of SDLT but you can get a refund for the difference provided you sell your main (or first) residence within 36 months. And apply for the refund within 12 months of the sale of your first main residence.

I'm buying my first property but it's "buy-to-let" - do the higher rates apply to me?

No - if you (and your spouse/partner) only own one property then the lower rates apply even if you plan to let the property.

I'm buying a second property as "buy-to-let" - do the higher rates apply to me?

Yes - if you already own a property then any further properties will be subject to the higher rates.

I sold my primary residence last year - do the higher rates apply to me?

No - if you sold your primary residence within the last 36 months then you can purchase another property to be your primary residence at the lower rates regardless of whether or not you own other properties.

I'm moving to a new home but renting my old one - do the higher rates apply to me?

Yes - the result is that you own two properties so the purchase of the new property will attract the higher rates of SDLT (regardless of the fact that it is to become your main home).

I already own a property jointly with a friend but am buying another property - do the higher rates apply to me?

Yes - the result is that you own two properties so the purchase of the new property will attract the higher rates of SDLT (regardless of whether or not you make it your main home).

I'm buying my first property but jointly with a friend who already owns a property - do the higher rates apply to me?

Yes - the result is that your friend owns two properties so your purchase of the new property will attract the higher rates of SDLT (regardless of the fact that it is your first property).

I already own a property overseas - do the higher rates apply to me?

Yes - if you already own a property overseas then any property you buy in the UK will be subject to the higher rates.

My spouse (or civil partner) owns a property - does that affect me?

Yes - as far as the test is concerned you and your spouse or civil partner are treated as one entity. If they already own a property then your purchase will be deemed to be an additional property and be subject to the higher rates of SDLT.

Can I avoid the higher rates if I purchase in the name of a company?

No - any property purchased by a company will be subject to the higher rates of SDLT (even if the company does not own any other property).