Higher rates of SDLT on residential property

The higher rates of Stamp Duty Land Tax (SDLT) were introduced on 1 April 2016 and apply to purchases of additional residential property such as buy to let properties and second homes. The higher rate is 3% higher than the regular SDLT rates and applies to the purchase of additional residential properties valued at over £40,000.

The higher rates of SDLT apply to purchases of additional residential properties in England and Northern Ireland. The higher rate does not apply to individuals who own only one residential property, irrespective of the intended use of the property.

You might be required to pay the higher rates even if you plan to live in the property you are purchasing even if you do not own another residential property. This is because the rules apply not just to you (the buyer), but also to anyone you are married to or purchasing the property jointly with.

Multiple Dwellings Relief (MDR) was an SDLT relief which had benefitted purchasers of multiple residential properties. However, MDR was abolished for transactions which complete, or substantially perform on or after 1 June 2024.

The Scottish Land and Buildings Transaction Tax (SLBTT) applies to transactions where the land is situated in Scotland. There is a 6% SLBTT supplement for purchases of additional residential properties.

Similarly, the Welsh Land Transaction Tax (WLTT) applies to transactions where the land is situated in Wales. There is a WLTT higher rate supplement of 4% on purchases of additional residential properties.