The new Stamp Duty levy & what it will cost you

1st April 2016 / in News / by Gordon Hunter, MD

From the 1st of April 2016, the government will introduce a new Stamp Duty levy which will be payable when you purchase an additional home in the UK, whether a holiday home or buy-to-let.

The surcharge will apply even if the home you already own (or part-own) is overseas.

The new Stamp Duty rates for additional properties will be:

Purchase Price  Current RateNew Rate
Over £40,000 and up to £125,0000%3%
Between £125,001 and £250,0002%5%
Between £250,001 and £925,0005%8%
Between £925,001 and £1.5 million10%13%
Over £1.5 million12%15%

For an example, if you bought an additional property at a price of £200,000:

  • The extra 3% Stamp Duty = £6,000 (3% of the entire price)
  • Regular Stamp Duty bill = £1,500
  • Total to pay = £7,500

What to look out for…

  • If you directly replace your main residence with a new home, you won’t have to pay the 3% surcharge
  • If you move into a new home and keep your last home you will initially have to pay the 3% Stamp Duty. As long as you sell your last home within 36 months, HMRC will make a refund.
  • If you are buying a home with someone who already owns one, the additional 3% Stamp Duty will apply.
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Source: HMRC, March 2016,
https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties

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