Non-resident SDLT surcharge

The measure

The government will introduce a stamp duty land tax (SDLT) surcharge for non-residents buying residential property in England and Northern Ireland to take effect from 1 April 2021. The surcharge will apply at a rate of 2% above the current residential rates (including the higher rates for additional dwellings and companies, the flat 15% rate and the first time buyers’ rates). The measure is subject to final legislation in Finance Act 2021 but no significant changes have been indicated from the draft legislation published in 2020.  


Who will be affected?

Non-residents buying residential property in England and Northern Ireland. The charge will apply to non-resident individuals and non-natural persons including companies, trusts and partnerships, as well as to UK-incorporated close companies with non-resident shareholders. 


When will the measure come into effect?

The surcharge will take effect from 1 April 2021. Transitional rules apply such that a contract which is substantially performed (without having been completed) prior to 1 April 2021 should not fall within the scope of the surcharge.

Our view

The introduction of the surcharge has been expected for some time having been originally announced at Budget 2018. The government expects initially to increase the tax take by £250m for 2020/21 as buyers complete their purchases before the introduction of the surcharge, but does not then expect to raise any additional tax from this measure until 2023/24.