In the Budget yesterday the additional stamp duty surcharge of 3% on second home purchases was confirmed.

Despite hints from the Treasury that this surcharge would not apply to those who own at least 15 properties, it was also announced that this levy would also apply to larger scale landlords.

Law firm Addleshaw Goddard said the stamp duty hike for large resi developers and investors  was “motivated by fear of EU state aid rules.”

It says the effect of this will be additional costs for institutional landlords, which will potentially have an adverse impact on the burgeoning Build To Rent and private rented sectors.

On top of this, the Chancellor announced changes to the way SDLT will be charged on commercial property, introducing a new marginal ‘slice’ system that mirrors the rules that apply to residential property.  The effect of the change is that, from today (17 March), investors in properties costing over £1.05m will be paying more in SDLT than previously on new acquisitions.

Michael Hunter, partner at Addleshaw Goddard, said: “The Chancellor’s u-turn on exempting institutional and other large investors from the 3% supplementary SDLT hit was a surprise, probably motivated by fear of EU state aid rules or yet another judicial review challenge from the ‘buy-to-let’ investors.

“Commercial property investors will be dismayed by the fact they are paying up to 25% more SDLT to fund a cut for smaller property purchasers.

“Some increased flexibility on corporate loss relief was overshadowed by an onerous 50% restriction on use against future profits.”