Will you have to pay the SDLT surcharge?

If you already own at least one property and you buy a residential property in England or
Northern Ireland, you may have to pay the stamp duty land tax (SDLT) surcharge. This can
significantly add to the cost of buying a property.
Higher rates of land and building transaction tax (LBTT) apply to the purchase of second and
subsequent residential properties in Scotland, while higher rates of land transaction tax
(LTT) apply in Wales.
Higher rates of SDLT
Higher rates of SDLT are payable on the purchase of a residential property where the
consideration is at least £40,000 if all of the following apply:

  1. The property will not be the only residential property worth at least £40,000.
    Overseas properties are also taken into account in applying this test.
  2. You have not sold or otherwise disposed of your previous main residence.
  3. No one else has a lease with at least 21 years to run on the property.
    The higher rates only apply to residential property – they do not apply to property that
    comprises both residential and non-residential elements, or to commercial property. In
    addition, the higher rate does not apply where the main residence is exchanged, for
    example, if someone who has a buy-to-ley property sells their main home and buys a new
    home.
    Where the higher rates apply, SDLT is payable at an additional 3% on the residential rates.
    The higher rates will typically apply where a person purchases and investment property or a
    second home.
    Scotland
    Land and builds transaction tax (LBTT) is payable on property purchases in Scotland. An
    additional dwelling supplement is payable on the purchase of additional dwellings in
    Scotland, such as buy-to-let properties and second homes. The supplement adds an
    additional 4% to the standard residential LBTT rates.
    As with SDLT, it is not payable where the main residence is exchanged.
    Wales
    Land transaction tax (LTT) applies in Wales. As with SDLT, the higher rate of LTT applies
    where a personal purchases a residential property worth at least £40,000 and they already
    own at least one residential property. The exception is on the exchange of a main residence.
    The higher rate adds 3% to the standard residential rates.

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