This most commonly applies to flats. You own the property for a fixed term, but not the land on which it stands.
Leasehold properties require an annual ground rent to be paid to the landlord or ‘freeholder’.
This is where you own the property and the land on which it stands, and there is no time limit to the period of ownership.
If you are buying an additional property valued at over £40,000 you will be quoted a higher rate of Stamp Duty, which is 3% above the current SDLT rates. Additional properties include ‘buy to let’ properties and ‘second homes’.
If, at the end of the day of the property purchase transaction, you own two or more residential properties and are not replacing the property you live in, you will be charged the new higher rate of SDLT.
In certain circumstances you may not need to pay the higher rate, or you may pay the higher rate at the time of the transaction but be eligible for a refund at a later date. You should discuss your particular circumstances with your conveyancer who will be be able to clarify how much SDLT you will have to pay.
For more information on SDT on additional properties you can visit the HMRC website.