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Important changes to stamp duty on buy-to-let properties…

December 2nd 2015
By: Melanie Hollidge

Last week the Chancellor, George Osborne announced rise in stamp duty of 3% for property investors; this includes landlords and people investing in second homes.
 
As from April 2016 this is how much each SDLT band will go up for property investors:

•    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%).
 
According to the Fiscal Studies, IFS there will be a ‘rush’ on buyers looking to complete purchases ahead of the stamp duty levy, with many experts predicting that some 500,000 buyers will be attempting to buy a new property before the deadline next year.
 
Other changes announced by the Chancellor included investors having less time to settle their stamp duty bill, currently they have 30 days from purchase, this will be reduced by 14 under the new levy. As well as investors having to settle Capital gains on a property 30 days after completing.  
 
It’s not surprising that these changes have not been well received by landlords and economists Stuart Adams, a senior research economist at the IFS, stated: 'Properties will be worth less because potential landlords and potential homeowners won't be willing to pay as much for them ” and 'if property developers don't feel they're going to get as much for them, then there's less incentive to develop.' It will make rental properties and second homes more expensive and therefore discourage the purchase of properties for that purpose. 'It may well also reduce house prices and might also increase rents if it feeds through.'
 
If you would like to discuss these new changes why not pop into your local branch of Goodfellows or call our team on 0845 3727070.