The 3% SDLT surcharge for additional residential property was announced in the Autumn Statement last year. A consultation followed which received just under a 1000 responses; the government's response has been published as part of the Chancellor’s Budget 2016.  It has been confirmed today that from 1 April 2016, the following rates of SDLT will be charged on purchases of additional residential properties:

Click here to view table.

Despite a great deal of lobbying from funds and property industry, the Chancellor confirmed today that there will be no exemption for significant investors or bulk purchases. This will come as disappointing news for those operating in the private rented sector. However, lobbying is likely to continue in this area with the hope that the government will, in the near future, allow for some form of relief/flexibility in the way this surcharge operates. 

It will be possible for investors to be able to claim multiple dwellings relief (MDR) where multiple residential properties are purchased in single or linked transactions. That relief has the effect of reducing the SDLT payable on the units by way of averaging the purchase price of the units, especially effective when the portfolio is a mix of high value-low value properties. This may act, in some ways, as a cushion against the impact of the 3% SDLT surcharge for bulk purchases. 

Furthermore, the additional SDLT rate will not apply to purchases of 6 or more residential properties bought in a single transaction, as that will be treated as non residential property for SDLT. The SDLT rates for commercial property have also seen some changes today and most importantly, they, in particular, are effective from midnight tonight. See below for the new rates.

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