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Stamp Duty Land Tax changes take effect from the 1st April 2016 – what will this mean for you?

Stamp Duty Land Tax changes take effect from the 1st April 2016 – what will this mean for you?

22nd February 2016

Stamp Duty Land Tax changes take effect from the 1st April 2016 – what will this mean for you?

From the 1st April 2016 anyone purchasing a second home or a buy-to-let investment in England, Wales or Northern Ireland will be required to pay an additional 3% on top of each stamp duty tax band.

This means if you are completing on the purchase of a buy-to-let property or second home on or after the 1st April 2016 then you will pay more Stamp Duty Land Tax on that purchase compared to purchases completed before the 31st March 2016.

Below are some comparisons to help you work out how this could affect you:

Price Brackets                  Standard          Buy-To-Let/Second Home
                                         SDLT Rate        SDLT Rate from 1st April 2016

£0 - £125,000                       0%                  3%
£125,001 - £250,000             2%                  5%
£250,001 - £925,000             5%                  8%
£925,001 - £1,500,000          10%                13%
£1,500,000 +                       12%                15%

For example if you are purchasing a buy-to-let or second home at a purchase price of £275,000 and the sale will complete on or after the 1st April 2016 then the Stamp Duty Land Tax would be calculated as follows:

The first £125,000 @ 3%               =       £3,750.00
The next £125,000 @ 5%              =       £6,250.00
The final £25,000 @ 8%                =       £2,000.00
Purchase Price of £275,000      =       £12,000.00 Stamp Duty Land Tax