This applies on the purchase of ‘additional residential properties’, including buy-to-let and second homes and there is also a new starting threshold of £40,000 which captures nearly all buy to let transactions.
How does this compare to the previous regime?
We have included an example below to show you the impact the stamp duty change had:
| Value of property / buy to let (£) | Previous 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 |
Another blow for buy to let
In the March Budget Announcement, the Chancellor backtracked on initial proposals to exempt significant investors buying 15 or more properties from the additional Stamp Duty Land Tax (SDLT) 3% supplement. This has also removed the ability for individuals to buy properties through a company structure to avoid the additional SDLT.
There are still potential benefits of investing in property in a company structure and we would advise that you contact us to discuss your personal circumstances before coming to a decision.
Meanwhile, an extension of the ‘bridging period’ from 18 months to 36 months for relief on the 3% SDLT supplement on additional properties was announced. See our full Budget 2016 coverage here.
Those considering investing in buy to let can speak with our tax advisors at the outset, to ensure they are maximising all the available reliefs and considering the most appropriate structure. We can also review the position of those already investing in buy to let. Please contact us for a free, no obligation quotation.
Oscar heads our tax department and provides advice on tax structuring, planning and compliance services to entrepreneurs and their businesses.