Time is running out for Landlords to have their say on stamp duty changes – the government currently have a consultation on the changes to stamp duty, which closes on 1 Feb, so time is running out for landlords to have their say
Buy-to-let landlords and second home owners are set to be hit with higher costs from 1 April 2016, when the government intend to introduce higher rates of stamp duty land tax (SDLT) on the purchase of additional residential properties that cost more than £40,000.
The plans were first announced in the Autumn Statement and are intended to make it less attractive for individuals to enter or stay in the buy-to-let market, freeing up housing for buyers.
Rates are expected to rise by an extra 3 per cent above the current rates for each stamp duty rate band, which vary by property value.
Anyone owning a second property that isn’t their main residence and buying another, or replacing one they don’t live in, is likely to be affected by the changes. If you own a portfolio of buy-to-let properties, or have a second home, but plan to buy yourself a new home to live in and sell your current residence, then you will not have to pay the extra stamp duty.
However, mortgage brokers have warned that the proposals may have unforeseen consequences. For example, if someone is selling and replacing their current home they may find themselves hit with the surcharge if the sale of their existing property falls through after they have already signed for their new purchase.
The National Landlords Association have also raised concerns about the impact of the changes, saying:
“It has been harder to become an owner-occupier since the financial crisis and harder to get social housing. If you choke off buy-to-let it’s going to become more expensive to bring new stock into the private rented sector.”
The Treasury has a consultation on the reforms which closes on 1 February 2016, so time is running out to have your say. It is then expected that the policy will be outlined at the 2016 Budget on 16 March.
If you own multiple properties and will be affected by the changes, you need to make sure your portfolio is structured in the most tax efficient way possible. Speak to our specialist team today.
Ormerod Rutter Chartered Accountants, The Oakley, Kidderminster Road, Droitwich, Worcestershire, WR9 9AY
Tel: 01905 777600 Web: www.ormerodrutter.co.uk
Consultation on higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties – see here