Buy to let and second home stamp duty increases

8th February 2016


The rules on who will be affected have still not been finalised but the Treasury has published a consultation paper that sheds more light on the proposed tax increases.

As it stands, landlords are set to be hit with an extra 3 per cent charge on each stamp duty rate band, which vary by property value.

For example, anyone buying a £200,000 second home or buy to let before April pays stamp duty of £1,500.

This is based on paying zero per cent on the first £125,000 of the property value and 2 per cent on the portion between £125,001 and £250,000.

But from April, landlords will have to pay 3 per cent for the first £125,000 and 5 per cent instead of 2 per cent on the amount between £125,001 and £250,000.

This gives them a total bill of £7,500.

So a landlord would end up paying five times more than a private purchaser in this example.

It is not just landlords that will be hit but anyone owning a second home.

This could be parents buying a property for their children or a couple purchasing a home together where one is already a homeowner.

The full details of the policy will be outlined at the 2016 Budget on March 16.

Band Existing residential SDLT rates Proposed rates for landlords/2nd property owners
£0 - £125k 0% 3%
£125,001 - £250k 5% 8%
£250,001 - £925k 5% 8%
£925,001 - £1.5m 10% 13%
£1.5m + 12% 15%

If you would like more advice on your options please call our offices on 01603 750024 or email ask@pfgmail.co.uk where one of our expert advisers will be able to assist you.

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