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Are you prepared for Stamp Duty changes in 2016?

  12 Feb 2016

As of 1st April 2016, a 3% surcharge on stamp duty land tax, or SDLT, will be imposed on people buying a second property or a buy-to-let property. A quick example of the impact that this change will have can be seen in the impact on stamp duty for a £275,000 property. The stamp duty for this valuation is currently £3,750 but after the change in stamp duty, this would rise to £12,000. This represents a sizable rise in stamp duty and it is understandable that this is likely to have a big impact on the property market.

Are you exempt from this change?

There are not many exemptions to this stamp duty change, with even people owning property abroad being affected by it. However, the change will not impact on people with a property valued at £40,000 or less, people who own houseboats, mobile homes or caravans or institutions or companies that own at least 15 properties.

You may be thinking that you are not planning on buying a second property or enter the buy-to-let market at any point in the foreseeable future, but the changes may still impact on your life.

Landlords or buy-to-let investors

This is the market that the changes are aimed at, so it is understandable that the stamp duty changes will be very relevant to this group. Quite simply, if you buy a property to let out after the 1st of April, you’ll be paying a lot more money for the privilege. This means that you’ll need to pay close attention to the rental yield you expect to receive. If all other things are equal, spending more money in purchasing the property will see you receiving a lower rental yield, which may dampen or remove your enthusiasm or motivation for buying the property.

Your rental yield is based on various factors so it may be that you can offset this change by charging a higher rental fee or lowering the amount of money you spend on maintaining the property. These aspects are likely to impact on the level of demand for your property, but it is something to bear thinking about.

The changes mean that many people interested in this market are moving quickly, buying property before the changes in stamp duty come into effect. This can save money but you need to act quickly.


Tenants have to expect to be impacted on through this change. If landlords have to pay more money to buy a property or develop their portfolio, it is likely that this will be passed on to them in higher rent or a reduction in services or value. This means that tenants will have to re-evaluate what they currently pay to rent a property and whether any changes can be afforded by them or justified.

People looking to sell their home

If you had intended to sell your property at some point in the near future, you need to be aware that the changes in stamp duty could impact on the demand in the market. It is likely that some landlords will decide against buying further property, which could make it harder for you to sell your property. Some people have decided to act quickly and place their property onto the market now before the changes come into effect.

Given the sizable impact this change will have on the property market in the United Kingdom, it is likely to have some impact on the economy as a whole. This means that everyone could be affected by the changes in stamp duty but landlords, tenants and people who were planning on being active in the property market this year will be most affected.


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