UK buy-to-let stamp duty changes from next year
- 26th November 2015
- Accountancy & Finance
Buy-to-let investors and holiday home buyers will have to pay stamp duty rates that are three percentage points higher as from April next year.
Special "landlord" stamp duty tax rates will come into force from April 2016, meaning that investors will have to pay thousands of pounds more extra in tax than they do currently. Those buying a property to live in will not be affected.
The changes will make a significant difference, as shown by the example of a £250,000 buy-to-let property, which will see the stamp duty payable leap from £2,500 to £8,800.
The increased rates will also apply to other second properties where the owners do not intend to live in full time, such as holiday homes.
The new move, which was announced in the Autumn Statement, is estimated to be worth an extra £625 million to the exchequer next year, rising to £880 million in the future.
Even if prospective buyers bring forward transactions to beat the new duty, the Treasury will expect to net an extra £30 million before April due to the surge.
The Spending Review and Autumn Statement document makes it clear that purchases of caravans, mobile homes and houseboats will not be affected, nor will corporate entities or funds that make significant investments in residential property developments.
The new move follows a stamp duty overhaul that took place only last year with the removal of so-called “cliff edges” in the system.
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