When Chancellor George Osborne delivered his Autumn Statement on the 25 November 2015, he delivered a hammer blow to Buy to Let Investors with changes in Stamp Duty for Buy to Let properties and Second Homes. Such changes will be effective from April 2016 and therefore if you are considering investing in a Buy to Let property, now is the time to do it before the changes are introduced.
The same rules will apply whether you are purchasing a property to let out as an investment or simply purchasing a second house as a holiday home. These new rates will not apply to the purchase of caravans, mobile homes or house boats.
George Osborne said “frankly people buying a home to let should not be squeezing out families who cannot afford a home to buy”. This is clearly going to affect the Buy to Let market in the future and will of course also raise considerable tax revenue for the Government.
Under current Stamp Duty Rules, purchasers of properties pay different rates for different proportions of the property price. This would mean that the following additional property Stamp Duty rates will apply on each portion of the purchase price on Buy to Let and Second Homes adding an extra 3% of the purchase price of Stamp Duty on any purchase price in excess of £40,000.
Purchase Price Current Rate New Rate for Buy to Let properties and Second Homes from April 2016
Up to £40,000 0% 0%
£40,000 – £125,000 0% 3%
£125,000 – £250,000 2% 5%
£250,000 – £925,000 5% 8%
£925,000 – £1,500,000 10% 13%
£1,500,000 + 12% 15%
If you are considering such an investment and need further advice on this or any other matter related to the purchase of a property, whether it will be your own property or for investment purposes, then please contact one of our dedicated solicitors in our Property Department on (01267) 237441.