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.
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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 0800 304 7880.
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