Increase in Stamp Duty Land Tax when you purchase UK investment property

Published 30 November 2015

The Stamp Duty Land Tax rates and bands were overhauled with effect from 3rd December 2014 making the application of the duty much fairer by removing the so called “slab system”. In the Chancellors autumn statement on 25th November 2015 he announced that from 1st April 2016 there will be a supplementary 3% duty on purchases of residential property that is not to be used as the owner’s principal private residence. This includes second homes, holiday homes and of course rental property.

This measure is targeted at owners with small portfolios and those with more than fifteen properties will be exempt. Purchases of houseboats, caravans and mobile homes are also to be exempt from the extra 3%.

If a landlord added a property costing £250k to his portfolio in the few years before 3rd December 2014 the Stamp Duty Land Tax would have been £2,500. If the purchase had been made between 3rd December 2014 and 31st March 2016 the Stamp Duty Land Tax would have been £2,500. And from 1st April 2016 the Stamp Duty Land Tax will be £10,000.

If the property cost had been £1.5m the Stamp Duty Land Tax would have been £75,000 to 3rd December 2014, then £93,750 until 1st April 2016 and £138,750 thereafter.

See Rates and Tables.

The only glimmer of light for now is that Stamp Duty Land Tax is deductible as an incidental cost of purchase when the landlord comes to sell the property.

The newsletters on this website are believed correct at the time of publication. They may not include subsequent changes in the law. If the subject matter is of interest you should contact us to see if there is a relevant update.

Taxation is a complicated subject and is subject to change. This article is provided for general guidance only. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article.

Landlords Tax Services Ltd, specialises in the taxation of residential property income and gains and around half its clients are resident outside the UK. If you would like specialist help contact Maurice Patry F.C.A. at or for more information visit our website at Landlords Tax Services Ltd