Increased stamp duty on buy-to-let and second properties
Property investors were dealt a blow when George Osborne announced in his Autumn budget that anyone buying second homes or buy-to-let properties would be hit with a higher rate of stamp duty. The new stamp duty rates are set to be introduced in April 2016.
Stamp Duty changes
Those who buy additional property (residential), including buy-to-lets and second homes will have to pay increased UK stamp duty of 3 percentage points, from April 1 2016.
So, this means that there will be 3% tax (an increase from zero) to pay on homes up to £125,000, 5% tax (an increase from 2%) on property that costs between £125,001 and £250,000, and 8% (an increase from 5%) on homes worth between £250,001 and £925,000.
Residential property worth up to £1.5m will be subject to 13% stamp duty and those over this amount will acquire a 15% charge.
What if you exchanged contracts before the new budget?
The answer is simple - If you exchanged contracts before November 25 – when the autumn budget was delivered – you will not have to pay the higher tax rate. Even if you complete after April 1.
Stamp duty costs can’t be avoided. However landlords - who will be hit heavy with the new stamp duty rule - have threatened to increase rents, to offset the rise in tax costs.
We’ll find the perfect mortgage broker for you - for free
Save time and money with an expert mortgage broker who specialises in cases like yours
- We've helped over 120,000 get the right advice
- Our form only takes a minute, then let us do the hard work
- Save up to £400 per year with the right advice (source: FCA)
- All the brokers we work with have whole of market access
Want to purchase before the stamp duty change deadline?
Since the news of the stamp duty changes was announced we’ve seen a significant increase in enquiries from potential investors wanting specialist advice.
If you’re thinking of buying a second residential or another buy-to-let property and want to get a mortgage approved ASAP, make an enquiry here or give us a call on 0808 189 2301.
Get in touch, we're always here to help!
You can contact us via any option below