UK Relocation: Higher Stamp Duty Rates Expected for Second (and Subsequent) Properties
The UK government has recently proposed a number of measures to help provide more affordable housing. Part of these measures aim to introduce a higher rate of Stamp Duty Land Tax (SDLT) for purchasing second and subsequent properties in England, Wales, and Northern Ireland. For more information, please download Cartus’ latest Mobility Insights: UK Relocation: Higher Rates of Stamp Duty Land Tax (SDLT) on Purchases of Second (and Subsequent) Residential Properties.
What’s the Proposal?
This proposed legislation has not yet been introduced, and if it is, the UK government estimates that around 90% of residential property transactions will not pay the higher rates. If it does pass the consultation phase (which closes 1 February 2016), it will be launched on 1 April 2016. The higher rates will be three percentage points above the current SDLT rates and will be charged on the portion of the value of the property that falls into each band.
Impact on Relocation Programmes
Assignees relocating around the UK will have to pay the higher SDLT rates if they purchase a second home, and if it’s part of your relocation policy, then this will impact the organisation—unless, following the consultation process, it can be determined that pre-existing relief afforded to relocation cases should be extended, so the proposed higher rates should not apply to relocation scenarios. The new, higher SDLT rates will also impact those organisations that purchase properties for assignees to move into.
As the higher SDLT rates will affect buy-to-let investors too, landlords may offset this extra cost onto rental rates. So, assignees moving into rental accommodations may see a resulting rise in rents, and organisations may want to consider adjusting housing allowances accordingly.
We expect the final legislation to be announced during the next UK government budget announcement on 16 March 2016, and we will provide an update on the potential impact to your UK relocation programmes. For more details on these proposed changes to UK immigration, download our Cartus Mobility Insights or contact a Cartus representative at email@example.com.