Thompson Smith and Puxon Residential Property lawyer Laura Finnigan, discusses the forthcoming changes to Stamp Duty Land Tax (SDLT).

Following on from my December article in which I discussed the changes to SDLT announced by the Chancellor in his Autumn Statement, higher rates of SDLT will be payable on purchases of additional residential properties, such as buy-to-let properties and second homes, from 1 April 2016. But there remains a great deal of uncertainty as to precisely how the higher rates will be applied.

Following the Government’s announcement in its Autumn Statement 2015, it has now commenced a consultation on the implementation of the changes. The consultation period runs until 1 February 2016 and it is hoped that the final legislation will be produced by 16 March 2016 (Budget Day).

Working from the Consultation Paper published on 28 December, the key question appears to be “how many properties will you own at the end of the day of the transaction?”.

If the answer is “one”, then the higher rates will not apply, whatever the intended use of the property. If the answer is “two” but the property is being purchased as your main residence, then the next question is whether or not the previous main residence is being sold. If the answer is “no” then the higher rates will apply. If the previous main residence is to be sold but has not yet been sold then the transaction is still subject to the higher rates but a refund is likely to be available if the previous main residence is sold within 18 months of completing the purchase of the new main residence.

The consultation will also consider issues such as a purchase by joint buyers where one already owns a property, purchasing property for children to occupy, and holders of large property portfolios possibly being exempt from the higher rates.

The Government’s consultation paper can be viewed here.

To find out more about how Laura can help with your residential property transaction contact her on 01206 217020 or by email on