The Autumn Statement is to include news rules (effective from April 2016) that anybody buying a ‘second’ property will have to pay an extra 3% on the current stamp duty thresholds.
The current and proposed rates are illustrated as follows:
|Property Value||Current Rate||New Rate|
|£40,000 – £125,000||0%||3%|
|£125,000 – £250,000||2%||5%|
|£250,000 – £925,000||5%||8%|
|£925,000 – £1,500,00||10%||13%|
There will be an exemption for anyone with 15 + properties, so as always a different set of rules for the very wealthy/corporations.
Richard Lambert from the National Landlords Association has accused the government of choking off future investment.
The government claims that the extra raised will go towards affordable housing for those who need it most.
In the short term this could cause a hike in property prices as investors try to get in before April 2016 with a subsequent lull.
The reality is that many people cannot afford to own their own property for whatever reason and have no choice but to rent. If there becomes a shortage in rental property, then all that will do is drive up demand and the rental prices, leaving the desperate even more desperate. This scheme can only really work if there is indeed a fulfilment of the promise of more affordable housing and properties available under the help to buy scheme.
In addition from 2019 landlords who sell will have to settle their capital gain tax liability within 30 days instead of the end of tax year (as it currently is)
It begs the question of why one would bother and want to be a landlord with so many hurdles (legal and financial) to overcome. Probably because it’s still a better pension plan…