The Chancellor has just announced in today’s Autumn Statement and Spending Review an increase Stamp Duty Land Tax (SDLT) on Buy to Let properties and second homes from April next year. But this could cause people to accelerate plans to purchase property for let as the costs for doing so next year will rise considerably.
SDLT on Buy to Let homes will increase by 3% from 1st April 2016. By doing this, the Chancellor is aiming to reduce the number of buy to let investors coming to market, enabling first time buyers to take their place.
However, by pre-announcing it, there could now be a period between now and April that will cause an influx of Buy To Let investors, who are taking advantage of the lower rate of tax before the changes are introduced.
Matthew Hall, who is Head of Tax and Partner at top-20 accountancy firm, Wilkins Kennedy, commented: “Those who have been considering investing in property could now decide to accelerate their plans following today’s announcement. This could mean that it will have the opposite effect over the next few months until April 2016 as investors flood the market as opposed to first time buyers and driving up house prices in the process.
“Earlier in the year, Osborne announced the reduction of tax relief on mortgage interest payments and made changes to the Wear and Tear allowance. Now landlords are facing a higher Stamp Duty, so we could see either higher rents or reduced rental supply in the longer term.
“It will be interesting to see how the housing market changes between now and April, whether we will see a little bit of heat and how house prices are affected as a result.”
Wilkins Kennedy LLP was established in 1882 and has grown to become one of the UK’s top 20 firms of Chartered Accountants and Business Advisers with a turnover of over £38 million.
The firm has 72 partners and approximately 500 staff over fourteen UK offices and one office in the Falkland Islands