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Chancellor's Autumn Statement 2015 – Increase in stamp duty for buy-to-let landlords

Chancellor's Autumn Statement 2015 – Increase in stamp duty for buy-to-let landlords

Buy-to-let landlords and people buying second homes will soon have to pay more in stamp duty, the Chancellor George Osborne has announced. From April 2016, those in England and Wales will have to pay a 3% surcharge on each stamp duty band.

Mr. Osborne hopes that this new ‘surcharge’ will raise £1bn extra for the Treasury by 2021.
However understandably many private Landlords have reacted angrily to the change, saying it will "choke off" investment in rented properties.

The stamp duty surcharge will lift each band by 3%. This means that from April 2016 for the average buy-to-let purchase, calculated to be approx £184,000, investors will pay an extra £5,520.

Crucially, Landlords and Investors will also now not be able to rely upon the previously protected nil rate band. Where once no stamp duty was payable on transactions up to £125,000, under the new rules Landlords will have to pay 3%.

When looking at this in context currently a Landlord purchasing a new property at £110,000 will not be liable for any stamp duty. However under the new rules they would be hit for a bill of £3300.00. Taking this into account it is not hard to see why this could be considered a clear barrier to those who specialise in lower end rentals or regenerating unloved properties.

However it is important to note that large Commercial property investors, with more than 15 properties, are expected to be exempt from the new charges.

Stamp Duty Rates (on purchases)

Property value Standard rate Buy-to-let/second home rate (April 2016)
Up to £125,000 0% 3%
£125 - £250,000 2% 5%
£250 - £925,000 5% 8%
£925 - £1.5m 10% 13%
over £1.5m 12% 15%

Source: HMRC

Buy-to-let landlords will also be hit by a change to Capital Gains Tax (CGT) rules.
From April 2019, they will have to pay any CGT due within 30 days of selling a property, rather than waiting till the end of the tax year, as at present.

Landlords are already due to get a lower rate of tax relief on mortgage payments. In his summer budget, the chancellor said that landlords would only receive the basic rate of tax relief - 20% rather than 40% on mortgage payments, a change being phased in from 2017.

This latest announcement suggests that the Chancellor is encouraging a shift in the residential rental sector away from amateur landlords towards institutional investors.

Up to £60m of the money raised from the stamp duty surcharge will go to help home-buyers in England in places where holiday homes have forced up local prices.

For further details about this or any other residential purchase or conveyancing matter contact Denis Childs on 01325 466461 or email via

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