Q.  I am exploring purchasing a buy to let property for investment, but I am not really sure I quite understand the stamp duty land tax implications for second homes, I want to be sure I recognise what I am getting myself into before I make the commitment, can you enlighten me?

A.  The government announced changes surrounding stamp duty introducing a 3% additional rate of Stamp Duty Land Tax (SDLT) on purchases of additional properties such as buy to lets and second homes with effect from the 1st April 2016. Because stamp duty is tiered you will pay a different stamp duty rate on different portions of the property value. For example, if you were to invest in a buy to let property for say £350,000 you would pay 3% on the first £125,000, 5% on £125,001 – £250,000 and 8% on the portion that falls above £250,001. So, in a nutshell whatever the standard rates are for your first home just had an extra 3% on top to calculate the correct rate. The higher rates can also have other implications too. All property owners purchasing an additional property to their main residence in England, Wales and Northern Ireland are affected by the rise in SDLT. If you already owned properties prior to this date but plan to buy a permanent home to replace another, you are exempt from the paying the higher rate. If you own two properties on the day of completion of the purchase of your second property but still legally own your first property and plan to sell, you are still obliged to pay the higher rate of SDLT. A refund is available if you sell your former residence property within 36 months. When applying the higher rates, a small share (50% or less) in a property which has been inherited within the 36 months prior to a transaction will not be considered as an additional property. Property buyers who own and reside in a property overseas but intend to purchase a second property in the UK are also eligible to pay the new SDLT rates.  If parents purchase a property for their children in their name and already own their home, they are eligible to pay higher SDLT as they will own two properties. However, if parents gift money towards a deposit but do not jointly own the property with their child, higher SDLT does not apply. So yes stamp duty liability is a bit of a minefield but any good financial advisor will be able to advise further if you still require further clarification on your position as a possible investor.