In this years Autumn Statement chancellor George Osborne announced that buy-to-let landlords and people buying second homes from April 2016 in England and Wales will have to pay a 3% surcharge on each stamp duty band.
Mr Osborne said the new surcharge would raise an extra Â£1bn for the Treasury by 2021.
The SDLT surcharge means that for properties worth between Â£125,000 and Â£250,000, where the Stamp Duty Land Tax is normally 2%, buy-to-let landlords will pay 5%.
|Buy-to-let rate from April 2016
|Up to Â£125,000
|Â£125 – Â£250,000
|Â£250 – Â£925,000
|Â£925 – Â£1.5m
Buy-to-let landlords will also be hit by a change to Capital Gains Tax rules.
From April 2019, landlords will have to pay any CGT due within 30 days of selling a property, rather than waiting till the end of the tax year, as at present.
Phill Coburn comments
At a time when many people are struggling to purchase properties this will more likely than not mean less properties being available to let. Unless the Government can persuade mortgage companies to revert to 100% mortgages for all then the increase in Stamp Duty could be self defeating if local authorities are faced with more and more homeless persons.
Coupled with higher rate tax relief on Buy to Let mortgage interest, and wear and tear allowance, being phased out one has to wonder whether there will remain any attraction for investors and savers to step in to, or remain in, the Buy to Let market.
To discuss how the changes in SDLT are likely to affect you or to find out more about our fixed fee conveyancing service, contact us on 0151 639 8273.