Osborne has enjoyed fiddling about with SDLT in recent years, overhauling the residential SDLT system in his 2014 Autumn Statement and announcing the new additional rate for second homes in the 2015 Autumn Statement.
The latter announcement was formalised in the 2016 Budget. An additional 3% will be charged on the purchase of second homes and buy to let properties from 1 April 2016. If, at the end of the day of the transaction, the purchaser owns two or more properties and has not replaced their main residence, then the extra tax will be charged.
If there is an overlap in the ownership of two main properties then the purchaser will have 36 months to sell the previous property and claim a refund.
For companies, the additional SDLT rate will apply to all purchases of residential property, not just on subsequent purchases. HMRC had consulted on exemptions for companies with large property portfolios (over 15 properties) but Osborne confirmed in his Budget speech that this would not be the case and all companies would be subject to the additional charge.
On non-residential property there were also changes. It had seemed odd that back in 2014 the residential SDLT system was completely revamped from a cliff-edge structure to a progressive banding method whilst the taxation of non-residential property stayed the same. This has now been aligned from 17 March 2016 with the following new rates for purchases:
The SDLT on leases on commercial property was already taxed on a marginal ‘slice’ basis but an additional rate has now been introduced for leases which have a net present value on the rent of over £5,000,000. These leases will now be subject to a 2% SDLT rate.