Stamp Duty Changes and Buy to Let
George Osborne’s 2016 budget had a few surprises for the UK, and not least of these were the new Stamp Duty changes. Buy to let landlords were in the frame for some rather rough treatment, and it’s not hard to see why property investors may be less than enamoured with these new regulations.
For those wishing to climb onto the property investor’s ladder and splash out on a second home, they will be looking at an extra 3 percent stamp duty charge. It appears that the buy to let property sector had been thoroughly investigated before the 2016 Budget was decided upon, and it could be rather a hard year ahead for those who are involved in this potentially lucrative market.
The stamp duty rise may not appear too harsh, but consider that before April you were looking at a charge of £1,500 on a purchase of £200,000. Now you would be incurring a charge of £7,500, thanks to the fact that the 3 percent rate kicks in for the first £125,000 and another 2 percent joins the party from £125,001 to £250,000.
This will no doubt be cutting rather deeply into the buy to let investors’ profit margin, and perhaps rental prices will rise to try and claw some of this back. But, whatever the direction that property investors decide to move, it is always important to be in full possession of the facts, and the possibilities, before entering the market. Talk to us at first4commercial for professional advice on buy to let investments.