Post budget summary – higher rates of SDLT on purchase of additional residential property

This summary follows on from previous posts. The budget has now been published and we now have confirmation that the higher rates will apply to purchases of additional residential properties on and after 1 April 2016 in England, Wales and Northern Ireland. The results of the consultation have been published with little change as a result. However these changes include:

• Allowing purchasers 36 months rather than 18 months, as the period purchasers have to claim a refund if they buy a new main residence before disposing of their previous main residence. The refund can be claimed once the previous main residence has been disposed of.
• Purchasers will also have 36 months between selling a main residence and replacing it with another without having to pay the higher rates‎.
• There is a transitional period where the 3 year period does not apply where the new purchase is on or before 25 November 2018.
• There are no exemptions for big investors.
• When applying the higher rates, a small share (50% or less) in a property which has been inherited within the 36 months prior to a transaction will not be considered as an additional property.
• The government will consider married couples who are separated and living in circumstances that are likely to become permanent, as divorced for the purposes of applying the higher rates. This is to allow for situation where a couple has not legally separated by court order (i.e decree nisi) or a deed of separation.
• An online calculator has been produced to enable buyers to work out the SDLT which is payable: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro