From April 2016 those looking to invest in the buy-to-let market will need to have deeper pockets as an increase in stamp duty was announced by the Chancellor in this week’s Autumn Statement.
George Osborne faces the wrath of the private landlord sector as he followed up the tax relief cuts imposed in the Summer Budget with a new levy on Stamp Duty for those buying additional properties.
The levy will see an additional 3% added to stamp duty across all bands, including those below £125,000 which currently attract no stamp duty, meaning a property bought for the average UK house price of £170,000 will now cost £6,000 in stamp duty compared to just £900. A rise of over 650%. It is worth noting that commercial property investors, with more than 15 properties, are expected to be exempt from the new charges.
Stamp Duty Rates – From April 2016
|Property value||Standard rate||Buy-to-let/second-home rate (April 2016)|
|Up to £125k||0%||3%|
|More than £1.5m||12%||15%|
This is a staggering increase and, understandably, landlords are not impressed.
Richard Lambert, National Landlords Association CEO, said:
“The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent.
“The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election.
“If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.
Along with the tax relief cuts and Insurance Premium Tax increases this has been an expensive time for those in the private rented sector and only time will tell if this has an impact on this industry which has seen unabated growth for years.