In his Autumn Statement, the Chancellor announced that from 1st April 2016, existing Stamp Duty Land Tax (SDLT) residential property rates will be increased by 3% for the purchases of additional properties, such as buy-to-let properties or second homes.

Following the restriction on interest relief on buy-to-let properties announced in the Summer Budget, the Chancellor has strengthened his clampdown on buy-to-let landlords in favour of first time buyers, and also hit prospective purchasers of second homes, including holiday homes. At the top end of the market, the extra SDLT payable will be significant; at the lower end of the market, time will tell whether the changes will deter buy-to-let investors.

It has been suggested that the additional rate of SDLT will not apply to corporates or funds making significant investments in residential properties, nor will it apply to the purchases of caravans, mobile homes and houseboats.

It is not yet clear whether there will be any impact in the scenario where a parent helps their child to get a foot on the property ladder, or in the situation where trustees purchase more than one property, perhaps for multiple beneficiaries.  It is also unclear whether the additional rate will apply to house moves involving short periods of bridging between properties, e.g. where a new property is purchased before a previous property is sold, although it is understood there will be some leeway in situations like this.

The finer details will become clearer in due course, and no doubt issues like these will be considered in the consultation process.

For more information, please contact the partner having responsibility for your affairs, or for new business any partner in the Private Client Department.