Stamp Duty Land Tax
Following the Autumn Budget 2024, significant changes to the Stamp Duty Land Tax (SDLT) effective today impact investors in UK property, particularly those form overseas and those purchasing second homes or rental properties.
The Chancellor has announced an increase in the SDLT surcharge from 5% to 7% for non-resident buyers purchasing a second home. This measure aims to prioritise domestic buyers and potentially ease housing market pressures in areas with high foreign investment, such as London.
Additionally, the SDLT surcharge for second homes or buy-to-let properties has risen from 3% to 5%. The rationale behind this hike is to support local buyers and discourage speculative property investments that may reduce housing availability for primary residents. However, industry experts warn that this could lead to reduced property investment and potential upward pressure on rents due to fewer properties in the rental market.
Previous budgets have also seen adjustments to the thresholds and rates, directly impacting affordability. As the Stamp Duty hike is tiered, the Stamp Duty can rise to 19% for overseas second home buyers and 17% for UK second home buyers. To give an example, SDLT on a £500,000 property for an oversea buyer, buying a second home was £37,500, would now increase to £47,500.
Whilst the government aims to address fiscal gaps and support housing access for local and domestic buyers by these stricter Stamp Duty surcharges for overseas and second-home buyers, these changes will impact both foreign and domestic investors looking at UK property as a lucrative rental investment.
For further information, please contact Partner Rima Shah at: rs@branchaustinmccormick.com.
