Higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties


From 1 April 2016 a 3% SDLT surcharge is imposed if after the purchase you will own more than one residential property.  If you are replacing your main residence then, although the increased SDLT will be due, a refund may be available if the original property is then sold within three years of the second purchase.  If you already have two or more residential properties and you sell your main residence the SDLT surcharge will also be refunded if you buy a new main residence within three years.

If the residential property is being purchased jointly with other people who already own one or more residential properties then the SDLT surcharge will be due.  For individuals buying a residential property with their spouse or civil partner, if their spouse or civil partner already owns a residential property the SDLT surcharge may be refunded if the original property is sold as noted above.

Any application for a refund of the SDLT surcharge must be made to HMRC within three months of the sale of the previous main residence or within 12 months of the filing date of the return, whichever is later.

The SDLT surcharge applies if the additional property is purchased for more than £40,000 in England, Wales or Northern Ireland or if you already own a residential property outside these countries.  From 2016 an additional dwelling supplement of 3% was also added to the Land and Building Transaction Tax in Scotland for certain residential transactions, the most common of which are the purchase of a rental property or holiday home in addition to your main home.

If you need assistance with any related matters, please do e-mail Simon at simon.johnson@kpmg.co.uk