Government accused of trying to kill buy-to-let sector
Buy-to-let investors will pay up to 15% stamp duty from April 2016, the government has announced.
Chancellor George Osborne used the government’s combined Spending Review and Autumn Statement to reveal that anyone buying additional properties will pay an extra 3% in stamp duty land tax.
Osborne’s third economic statement of 2015 (and the fourth within 365 days) also includes plans to build 400,000 new affordable homes in England by 2020 and details of a new Help to Buy scheme just for London.
However, landlords have accused the Chancellor of trying to kill the buy-to-let sector altogether.
Richard Lambert, chief executive of the National Landlords Association, said: “If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so?”
In his summer Budget, the Chancellor said that landlords would only receive the basic rate of tax relief – 20% – on mortgage payments, a change being phased in from 2017.
And from April 2019 buy-to-let investors will have to pay any Capital Gains Tax due within 30 days of selling a property, rather than waiting till the end of the tax year as at present.
The new stamp duty surcharge will lift each band by 3%. For properties worth between £125,000 and £250,000, where the stamp duty is 2%, buy-to-let landlords will pay 5%. Properties worth between £251,000 and £925,000 will be subject to 8% SDLT, which rises to 13% for second homes worth between £925,001 and £1.5m and 15% for investment properties worth over £1.5m.
The higher rates will not apply to the purchase of caravans, mobile homes or houseboats, or to corporate funds making significant investments in residential property.
Osborne explained: “This extra stamp duty will raise almost £1bn by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership.”
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