Buy to let investors and people buying 2nd homes will soon have to pay an extra 3% stamp duty from April 2016.
The chancellor have announced a 3% surcharge on each stamp duty band from April 2016 in England and Wales where anyone purchases a second property.
This is to raise an extra £1bn for the Treasury by 2021. However commercial property investors with more than 15 properties are expected to be exempt from the charge.
For example the average landlord buy to let property purchase is currently £184,000 and this would result in extra stamp duty payment of £5,520. Many landlords reacted angrily stating this would ‘choke off’ investment.
Up to £60m of the money raised from the stamp duty surcharge will go to help home-buyers in England in places where holiday homes have forced up local prices. This new tax will may people think about purchasing a 2nd property especially holiday homes.
Stamp Duty Rates (on purchases from April 2016)
|Up to £125,000||0%||3%|
|£125,000 – £250,000||2%||5%|
|£250,000 – £925,000||5%||8%|
|£925,000 – £1.5m||10%||13%|