Head office
Archdeacon House
Northgate Street
Ipswich
IP1 3BX
01473 927 365
Woodbridge Office
28 Church Street
Woodbridge
Suffolk
IP12 1DH
01394 388 488
Stamp Duty Increase for Landlords and Multiple Homeowners
In the Autumn Statement, Chancellor George Osborne announced a substantial increase in Stamp Duty on the purchase of additional residential properties. That will therefore apply to situations such as purchase of a property to let out or of a second home.
From April 2016 any such properties will face an additional 3% charge, on top of the existing levy.
This means the new stamp duty structure in England and Wales
will look like this:
Property Value |
Standard Rate |
Additional
Properties |
£0-£125,000 |
0% |
3% |
£125,001-£250,000 |
2% |
5% |
£250,001-£925,000 |
5% |
8% |
£925,001-£1.5m |
10% |
13% |
Above £1.5m |
12% |
15% |
Stamp duty is applied only to the portion of the property value falling in that band, similar to income tax.
So while a sole home valued at £300,000 would incur
£5,000 stamp duty, if that same £300,000 were an additional Buy to Let property
for example, the stamp duty charge would increase to £14,000 from April.
Property Value |
Standard Rate |
Additional Properties |
||||
|
Rate |
Applied to |
Cost |
Rate |
Applies to |
Cost |
£0-£125,000 |
0% |
£0 |
£0 |
3% |
£125,000 |
£3,750 |
£125,001-£250,000 |
2% |
£125,000 |
£2,500 |
5% |
£125,000 |
£6,250 |
£250,001-£925,000 |
5% |
£50,000 |
£2,500 |
8% |
£50,000 |
£4,000 |
Total charge |
£5,000 |
|
£14,000 |
Clearly that’s a massive increase in costs so we can expect a flurry of activity as potential “additional property buyers” seek to beat the April deadline. Anyone thinking about becoming a new landlord or adding to an existing portfolio is bound to be keen to complete the purchase before the new higher charges come into effect.
That could therefore intensify competition for suitable
property in the next few months. From
April, however, aspiring first time buyers may find life a little easier as
investor numbers ease back.
Guild Mortgage Service, Provided by London
& Country Mortgages
YOUR HOME
OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR
MORTGAGE
Most buy-to-let mortgages are not regulated by the FCA
Archdeacon House
Northgate Street
Ipswich
IP1 3BX
01473 927 365
28 Church Street
Woodbridge
Suffolk
IP12 1DH
01394 388 488
5 & 6 Crescent Stables
Upper Richmond Road
Putney
London
SW15 2TN
020 4524 9345
Poplar Hall Barn
Low Road
Debenham
Suffolk
IP14 6BS
01449 723 500
Established in 2020, Halls + Halls offers 40 years’ of expertise in the real estate industry. Our team provides an easy to understand, non-negotiable fixed fee product to sell property.