An extra 3% above current SDLT rates is to be charged on purchases of additional residential properties (above £40,000), such as buy-to-let properties and second homes, from 1 April 2016. 

The higher rates will not apply to corporates or funds making significant investments in residential property, on the basis that such investment is seen as supporting the government’s housing agenda. Nor will the rates apply to caravans, mobile homes or houseboats.

The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.

Taken with the announcements in the last Budget, implementing phased restrictions on interest deductions for buy-to-let properties from 2017, cumulatively, this could have a substantial adverse impact for those in this sector.

It will need to be monitored how this affects commercial landlords who invest in residential property portfolios.