Second home stamp duty in effect from 1st April 2016
Most people purchasing a second residential property will be subject to a new higher level of stamp duty tax as of 1st April 2016.
From the 1st April 2016, if you own two properties on a completion day, you may be liable for an extra 3% stamp duty tax on top of the standard rate. Those simply selling one main residence to replace it with another should not incur the new charge.
There are exceptions to the rule, however. You should check with your solicitor in regards to what your stamp duty bill might be - especially as this is a newly introduced levy. Different rules apply to non-married partners, civil partnerships, married couples and separated spouses, as well as to purchases made by companies. For full clarification, visit the Government's dedicated web page.
While many buyers believe the new rate applies exclusively to buy-to-let purchases, the truth couldn't be more different. If you already own a home and buy a property for a child, purchase a holiday home or buy a property together with a partner if you're already a homeowner, you may also have to pay an extra 3%. The new rate also replies if you buy a new main residence but delay selling your current one, although you can claim a refund if your original main residence sells with 36 months of the second purchase.
The table below shows the new rates applicable to second home purchases:
| Band |
Existing Residential |
New Additional Property |
| £0 - £125k | 0% | 3% |
| £125k - £250k | 2% | 5% |
| £250k - £925k | 5% | 8% |
| £925k - £1.5m | 10% | 13% |
| £1.5m + | 12% | 15% |
The Government will use some of the additional tax collected to provide £60 million for communities in England where the impact of second homes is particularly acute. The money raised will also help towards doubling the affordable housing budget. This will help first-time buyers and is part of the Government's commitment to supporting home ownership.
If you'd like help calculating your stamp duty bill, pop in to your local branch today and ask to speak with our in-house financial advisor. We are open seven days a week until late, even on Sundays.
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