The Residential Landlords’ Association (RLA) policy directory, David Smith is warning landlords to avoid firms offering schemes promising to help them avoid the new Stamp Duty Land Tax surcharge.
The RLA says a number of firms have been promoting schemes claiming to help landlords get around paying the additional charge – after April 1 anyone purchasing a buy-to-let property or second home for more than £40,000 must pay an addition 3% Stamp Duty.
What’s not immediately apparent is that most people who own a second home may be drawn into paying the additional charge when moving home. For example, a couple with a flat in London may want to retain the flat to rent-out, while buying a home outside the capital. In this situation they will end up paying the 3% surcharge on their “second”, home purchase. Likewise, those owning properties abroad may also be affected.
In a recent meeting with Treasury officials, Mr Smith was told that the new rules will be “incredibly restrictive” and the officials said that no more guidance will be made available on this until after the budget.
There seems to have been some confusion over the “15 property rule” as many commentators have put it out that those landlords owning 15 properties would be exempt the surcharge. This is not the case.
The treasure has confirmed that the “15 property rule” will apply only when investors are buying 15 or more properties at one time, and further these purchases would need to be on one contract and in a single transaction.
David Smith has said:
“Landlords should be very careful about making plans for their property purchases until after the budget.
“Any property purchases must be completed before April 1 if the buyers want to avoid paying the new levels of Stamp Duty Land Tax.
“The Treasury has made it abundantly clear that anyone offering schemes to get around the changes is talking nonsense.”
Schemes to avoid 3% SDLT levy unworkable – https://t.co/UHrAl7sD8r
— LandlordZONE (@LandlordZONE) February 9, 2016