You must pay Stamp Duty Land Tax (SDLT) on any residential property where the purchase price is over £40,000 and you are buying a second home or a purchasing the property as a buy to let.
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.
|Property or lease premium or transfer value||Old SDLT Rate||New SDLT rate|
|Up to £40,000||Zero||Zero|
|£40,000 - £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!
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