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.
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.
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.
Since the news of the stamp duty changes was announced we’ve seen a significant increase in enquiries from potential investors wanting specialist advice. Many need their mortgage approved quickly so their purchase completes before the deadline, and to cater for this the experts we work with offer an express service.
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.