HMRC has published a consultation proposing that a 1% stamp duty land tax (SDLT) surcharge is levied on top of existing rates where a non-resident purchases a residential property in England or Northern Ireland.
The government has stated that the aim of the surcharge is to help to control the rise of house prices and that proceeds raised will be used towards tackling rough sleeping.
The charge is expected to apply to any non-UK resident, which will also include some UK resident companies that are controlled by non-resident shareholders.
A 3% surcharge is already in place for any individual purchasing an additional residential property in the UK meaning that, depending on the value of the property, rates of between 4% and 16% could apply on second homes.
As an example, the different SDLT charges, which could arise on the purchase of a £600,000 residential property, would be:
| | UK resident | Non UK resident |
| Main residence | £20,000 | £26,000 |
| Additional home | £38,000 | £44,000 |
In this example, depending on the circumstances of the individual, there could be a difference of up to £24,000 on the SDLT charge applied for the same property!
It is proposed that a refund of the surcharge could be claimed by an individual where they spend 183 days or more in the UK in the 12 months following the day of the transaction (i.e. a refund of £6,000 in the example above). The consultation runs until 6 May 2019, with a commencement date for the new surcharge yet to be confirmed.