From April 2016, people buying second homes or buy to let properties in England and Wales will have to pay a 3% surcharge on each stamp duty band.
This surcharge will lift each stamp duty band by 3%. Therefore, even on 0% rated properties there will be 3% tax (currently zero) to pay on properties worth up to £125,000, 5% tax (currently 2%) on properties that cost between £125,001 and £250,000, 8% (currently 5%) on properties worth between £250,001 and £925,000, and so on through the stamp duty bands.
Are there any exemptions?
As this stamp duty rise comes into effect in April 2016, if you are currently purchasing a property and exchanged contracts before 25th November, you will not have to pay the higher tax rate even if you complete after 1st April 2016.
Buyers who exchanged after 25th November but complete later than 1st April 2016 will be expected to pay the surcharge.
Commercial property investors, with more than 15 properties, are expected to be exempt, but there are still consultations to be held on the rules.
What have the industry reactions been?
Through BBC News, Richard Lambert, chief executive of the National Landlords Association, has been very vocal, saying "The chancellor's political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it's the chancellor's intention to completely eradicate buy-to-let in the UK then it's a mystery to us why he doesn't just come out and say so".
The move was also described as 'catastrophic news for the private rental sector' by David Cox, the head of the Association of Residential Letting Agents.