Tax hike bad news for buy-to-let investors

Nexus Wealth Planning > News > Tax hike bad news for buy-to-let investors

Chancellor George Osborne’s revelation that he had found an extra £27bn of wriggle room for his Autumn Statement on Wednesday was good news for working families fearing a cut to Tax Credits and of modest benefit to state pensioners who will see a weekly rise of £3.35.

However, there was a sting in the tail for buy-to-let investors seeking to purchase property in England and Wales.

From 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will be charged on purchases of “additional” residential properties (above £40,000), such as buy-to-let properties and second homes.

The higher rates will be 3 percentage points above the current SDLT rates, meaning a property purchase of £300,000 would face a top levy of 8 instead of 5%.

The rules will not apply in Scotland, however, further emphasising the disparity between the two markets.

The current rates came into force last April.

Update (16/12/2015):  Scotland’s Finance Secretary John Swinney has announced that property investors north of the border will also be subject to the extra 3%.

Delivering his budget, Mr Swinney said the supplement would be added to the purchase price of the property, on top of the existing Land and Buildings Transaction Tax (LBTT).

BBC News

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