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%|
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