Buy-to-let landlords face additional stamp duty bill
25 Nov 2015
As part of his 2015 Autumn Statement, Chancellor George Osborne announced that buy-to-let landlords and owners of second homes will have to pay additional stamp duty on their property purchases.
With effect from April 2016, buy-to-lets and second homes will be subject to a 3% stamp duty surcharge on each stamp duty band. This means that for the purchase of a property worth between £125,000 and £150,000 the rate of stamp duty will increase from 2% to 5%.
The move is expected to boost Treasury coffers to the tune of £1bn by the year 2021.
However, critics of the scheme have argued that the measure will damage investment in property, coming as it does on top of an announcement in the July Budget of significant changes to tax relief on mortgage payments for buy-to-let landlords.
Commenting on the news, Richard Lambert 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’.
Some of the funds will be reallocated to homebuyers in areas of England in which the purchase of holiday homes has led to a lack of affordable housing.
The announcement was one of several measures relating to housing, with the Chancellor revealing a doubling of the housing budget, with plans to extend the Help to Buy scheme and to build 400,000 new affordable homes by the end of the decade.