The Chancellor, George Osborne announced in his Budget Statement that buy-to-let investors and those purchasing a second home are to be hit with a 3% increase in stamp duty as from April next year.
These new changes received much anger from Landlords who will be expected to pay for example, an extra £5,520 on a £184,000 property as from next April.
The Chancellor’s changes mean that each SDLT band will go up by 3% for buy-to-let properties as follows from next April 1:
* Property purchase of £40,000 to £125,000 – Stamp Duty will be levied at 3% (currently 0%)
* Up to £250,000 – 5% (currently 2%)
* Up to £925,000 – 8% (currently 5%)
* Up to £1.5m – 13% (currently 10%)
* Over £1.5m – 15% (currently 12%).
Other changes announced in the Budget include giving less time for buy-to-let and second home purchasers to settle their Stamp Duty Bill; this will be reduced from the current 30 days to only 14.
Investors will also have to settle their Capital Gains Tax bill earlier too, in the past they have had up to 21 months, this has now been reduced to 30 days.
The Chancellor stated that money raised from these changes is going to be reinvested in building new homes in areas such as London, the Lake District and Cornwall, where local people have been priced out of the property market.
The NLA, National Landlords Association, Richard Lambert stated: “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.”
Landlords were also hit badly in the July budget, as tax relief on mortgage payments has also been reduced along side a less generous annual wear and tear allowance.
“The buy to let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution” says Stuart Law, chief executive of Assetz for Investors, a pro-buy to let organisation.
If you would like to find out more information why not pop into your local branch of Intercounty for a cup of coffee and a chat or give our team a call on 0330 159801.
Source: Property Industry Eye