On 10 December 2015, in response to a written question, the Financial Secretary to the Treasury clarified that the increased SDLT charge for second homes and buy-to-let properties is to apply to:
- Foreign investors and people not domiciled in the UK in exactly the same way as UK residents.
- Persons owning another property anywhere in the world and purchasing an additional property in England, Wales or Northern Ireland.
Both buy-to-let landlords and wealthy foreign investors have been blamed for increases in UK house prices that have driven the cost of home ownership beyond the means of many UK residents, so the inclusion of both categories of person within the increased SDLT charge suggests that rebalancing the UK housing market is, at least, one of the drivers behind the charge. However, the wide ambit of the charge means that those coming to live and work in the UK need to be cautious of triggering the charge.
SDLT higher rate for additional residential property: clarification on work-related accommodation and consultation timing
On 14 December 2015, the Financial Secretary to the Treasury, in response to a Parliamentary written question, clarified whether the proposed higher rate of SDLT will apply to the purchase of buy-to-let property by a person who currently resides at a property for the purposes of their employment.
In response, the minister confirmed that work-related accommodation that is provided and owned by an employer will be disregarded in determining whether a person is acquiring an additional property.
The minister also stated that the government "will shortly consult on the policy design, including on the treatment of particularly difficult cases...". We have obtained clarification from HMRC about how this sits with the government's announcement, on 9 December 2015, that it will publish draft legislation in January 2016 We understand that draft legislation will not be published in January 2016, as this will be preceeded by the publication of a formal consultation document. Draft legislation will only be published after the consultation period has ended and responses have been reviewed.