Stamp Duty Changes – how does it affect buyers, sellers and investors?
The government's Stamp Duty changes announced in the recent Autumn Statement came as a surprise and has resulted in a great deal of debate inside the property industry and further afield.
George Osborne announced changes to the Stamp Duty levy to those looking to purchase a second home or a Buy-to-Let investment which will come into effect on or after 1st April next year.
Essentially, the new legislation has been put in place to level the playing field between Buy-to-Let investors, second home owners and first time buyers. Those looking to purchase a second home or Buy-to-Let investment on or after 1 April 2016 will pay an additional 3% Stamp Duty levy, which will be introduced at a lower starting point of £40,000 rather than £125,000.
The Chancellor’s changes mean that each Stamp Duty Land Tax (SDLT) band will go up by 3% for Buy-To-Let properties as follows from next April 1:
- Property purchase of £40,000 to £125,000 – Stamp Duty will be levied at 3% (currently 0%)
- Up to £250,000 – 5% (currently 2%)
- Up to £925,000 – 8% (currently 5%)
- Up to £1.5m – 13% (currently 10%)
- Over £1.5m – 15% (currently 12%).
What does this means for home-owners and for investment buyers?
The announcement is likely to encourage more sellers to put their property on the market so we expect to see increased levels of activity on the sales side relatively quickly. For investor landlords, the changes represent an opportunity to enter into the property investment market - or add to existing property portfolios - now and ensure completion of any purchases is before 1st April.
Another consideration is large scale investment. Landlords with more than 15 properties will be exempt from the higher stamp duty rates and this will be a viable and attractive option for some investors.
At Hunters we want our customers to feel well informed and take decisions based on facts and valuable advice. Apart from our fully trained lettings agents we have a dedicated Buy-to-Let investment team who can help unravel the new stamp duty implications;
- what it means for you
- what opportunities this presents now and in the future
- how we can help you make the most of these opportunities
We can offer advice on any property investment you are considering. In addition to our team, we work closely with several third party stakeholders who can offer our customers information and guidance on tax implications for all property investment you are considering, now or after April next year. For more information specifically relating to property taxation take a look at this useful blog.
If you would like further advice, or speak to Hunters about opportunities for Buy-to-Let investment, contact your local branch or click here to email Maryam Bham, Business Development Manager (Buy-to-Let Investment Specialist).