Companies must pay the higher rates for any residential property they buy if it is £40,000 or more and if the interest they buy is not subject to a lease which has more than 21 years left.

If the property costs more than £500,000, the 15% higher threshold SDLT rate for corporate bodies may apply instead.

Partnerships have to pay the higher rates if the partnership already owns a residential property and purchases another residential property for that partnership.

For individuals who are a partner but are buying on their own behalf, the rules do not apply to the other partners unless they are that individual’s spouse.

Partners will not have to pay the higher rates if they buy a property for themselves and their only additional properties are used for their partnership’s trade.

Higher rate SDLT was originally introduced as part of government moves to discourage the purchase of second homes, and therefore a reduction in available housing stock. The rate is 3% for purchases under £125,000, rising to 15% on those over £1.5m.

Guidance: Higher rates of Stamp Duty Land Tax is here

Report by Pat Sweet