Extra stamp duty land tax (SDLT)

You may have heard that an extra stamp duty land tax (SDLT) charge applies to second properties from 1 April 2016.  What’s it about ?

From April 2016 an extra 3% SDLT will be charged on purchases of additional residential properties such as buy-to-lets and second homes which cost over £40,000.

EXAMPLES:

Purchase Price £125k £500k £1m
Current SDLT charge £nil £15,000 £43,750
New SDLT surcharge £2,550 £13,800 £28,800
Total SDLT charge £2,550 £28,800 £72,550

Over the next three months, some people may be enticed into beating the new tax by buying properties early.  However, if loan finance is being sought, investors should consider very carefully the impending restrictions on tax relief for loan interest and finance costs and how this will impact on the investment returns.

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