The 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland will apply from 1 April 2021. The government argues this will help to control house price inflation and to support UK residents to get onto and move up the housing ladder.

Tom Evennett, EY’s head of private client services, said: ‘In 2019 the government consulted on a 1% SDLT surcharge for non-residents, while at the time of the election the Conservative party suggested that this surcharge might be as high as 3%.

‘Ultimately, the Chancellor split the difference and announced that a surcharge of 2% will apply to purchases of property by non-UK residents with effect from 2021.

‘Based on announcements at the time of the election, this surcharge will be in addition to the 3% surcharge for second homes – taking the possible top rate of SDLT for overseas buyers to 17%.

‘The consultation in 2019 included some surprises in the definition of non-resident – for example those who spend less than six months in the UK in a tax year may find themselves subject to the surcharge.  This could have an unexpected impact on mobile workers and on globally mobile entrepreneurs.

‘The Red Book suggests that over five years the £140m raised by this measure will help to fund the support the Chancellor announced to address rough sleeping.’

Other property tax changes cited in the budget include the introduction a relief from SDLT and the annual tax on enveloped dwellings (ATED) for qualifying housing co-operatives.

This will apply to both the ATED and the 15% flat rates of SDLT on purchases of dwellings over £500,000. The SDLT relief in England and Northern Ireland will take effect from Autumn Budget 2020 and the UK-wide ATED relief from 1 April 2021.