Changes in buy-to-let stamp duty

changes in stamp duty
Dec 09 2015

Changes in buy-to-let stamp duty

Changes in buy-to-let stamp duty

 

The Treasury’s Spending Review and Autumn Statement released today, informs us of a new set of rates for buyers of residential property for rent and for second homes.

As from April next year, stamp duty rates will increase by 3% for buy-to-let investors and also holiday home buyers.

The announcement of the special landlord stamp duty tax means that those buyers will be paying thousands of pounds extra as from April 2016. It will however, not affect those buying property to live in.

For example: the tax bill on a buy-to-let property costing £250,000 will increase from £2,500 to £8,800.

This will also affect those buying a second property, where they won’t be living in it full-time, like a holiday home.

Here are some examples of the increases:

Value of second property/buy to let Current SDLT SDLT from 1 April 2016 Increase in tax
(£) (£) (£) (£)
150,000 500 5,000 4,500
250,000 2,500 10,000 7,500
350,000 7,500 18,000 10,500
450,000 12,500 26,000 13,500

 

The Treasury estimates the increase in taxes will net the exchequer £625 million next year and £880 million.

An extra £30 million is expected in house purchases before the changes in April.

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