The draft guidance clarifies that the extra 3 per cent charge applies where a purchaser owns more than one residential property at the end of the day of its purchase, irrespective of the intended use of the property. All contracts entered into on or after 26 November 2015, where completion takes place after 1 April 2016, will be caught, whether the buyer is resident in England, Wales or Northern Ireland or foreign.
An exception applies to properties bought to replace the main residence, provided the original main residence has been sold. The surcharge will, however, have to be paid if the new main residence is bought before the old one has been sold, but the buyer can claim a refund if the old one is sold within 18 months of the new one being bought.
Also it is not clear exactly what the definition of 'main residence' will be. There is to be no right to elect which residence is the main residence for SDLT purposes, so it may differ from that for capital gains tax. HM Revenue & Customs will instead determine it as a 'matter of fact', by 'taking into account' a group of 'factors' set out in the consultation paper.