The Autumn Statement proposed the introduction of a new 3% additional stamp duty land tax (SDLT) charge when a purchaser acquires additional residential property. There is a dual purpose behind the policy. Firstly, to discourage investors from purchasing properties (to the detriment of first time buyers) through an additional tax charge. Secondly the Government intends to recycle some of the additional tax receipts to fund investment in delivering new homes.
The new rate came into force on 1 April 2016 and, subject to exceptions, will apply where an individual will, at the end of the day on which a residential property is acquired, own more than one residential property. To combat possible avoidance, the first acquisition (and any subsequent acquisition) of a residential property by a company or collective investment scheme will also be subject to the additional charge.
You may recall that the Government launched a consultation at the end of last year to which we responded having canvassed your views through our own survey. The Government has now published the draft legislation and guidance and we briefly discuss below some of the more interesting points that arise from it.
The content of this article is for general information only. For further information regarding SDLT, please contact Karl Pocock. Law covered as at June 2016.