What the new stamp duty rates mean for investors
Property investors who are looking to buy property this year have been recommended to buy homes now, to avoid the new stamp charges that are due to come into force on 1st April 2016, to increase the likelihood of the deal being successful.
The stamp duty change that is due to come into force, will add a 3% surcharge onto property investors looking to do buy-to-let mortgages.
The announcement of the 3% surcharge has been found to make landlords consider moving away from buy-to-letting investments.
Financial planning expert Rachael Griffin said: “Many landlords are already concerned that the margins on buy-to-let investment are being squeezed and for some this may be the final nail in the coffin.
“It could trigger a wave of sell-offs from buy-to-let landlords looking to avoid the surcharge in April 2016.”
| Value of second property/buy to let (£) | Current SDLT (£) | SDLT from 1 April 2016 (£) | Increase in tax (£) |
|---|---|---|---|
| 150,000 | 500 | 5,000 | 4,500 |
| 250,000 | 2,500 | 10,000 | 7,500 |
| 350,000 | 7,500 | 18,000 | 10,500 |
| 450,000 | 12,500 | 26,000 | 13,500 |
Can Stamp Duty be reduced?
Stamp duty is only payable on the land purchase, meaning that fixtures and fittings that are removable, such as wardrobes, sofas and curtains, are not subject to Stamp Duty Land Tax (SDLT), so therefore can be removed from the total property price.
If a seller agrees to leave certain processions, you can discuss an agreement to pay a reasonable amount between yourself and the vender and deduct it from the property price. This can be executed by a tax lawyer or conceyancer.
