Additional SDLT on Second Homes and Buy-To-Let Properties

07 December 2015

On 25 November 2015, the Chancellor of the Exchequer announced that purchases of additional residential properties (e.g. second homes or residential investment properties) will be subject to an extra three per cent Stamp Duty Land Tax (SDLT) on top of current rates for each SDLT band.

The SDLT rates remain the same for purchases of residential properties used as the buyer’s principal residence.

The additional SDLT will be payable on relevant completions with effect from 1 April 2016 (an extra amount of SDLT will be payable equal to three per cent of the total price of the property). However, the additional SDLT will not apply to completions of purchases where contracts were exchanged on or before 25 November 2015.

Second homes and buy-to-let properties with a value of up to £40,000 will be tax free, but for all purchases above that threshold the additional three per cent tax becomes payable on the entire price.

The below table sets out the current rates and new rates of SDLT for purchases of additional residential properties.

Band Existing SDLT rates New Additional SDLT rates
£0 – £125k 0% 3%
£125k – £250k 2% 5%
£250k – £925k 5% 8%
£925k – £1.5m 10% 13%
£1.5m + 12% 15%


The above details are provided by way of information only and are not a substitute for legal and/or tax advice specific to your personal circumstances.  You should consult with us (or another professional advisor) to see how the changes might affect your specific property purchase.  There may be other exemptions available to you that are not set out in this article.