George Osbourne has announced that there will be a 3% increase in stamp duty for buy-to-let properties and second homes from April next year.
With many thinking that this will damage investments into the buy-to-let business, George Osbourne has said that, “more and more homes are being bought as buy-to-lets or second homes".
Many believe that this prevents home buyers from getting on the property ladder because it raises the prices in areas full of holiday homes and also takes affordable property.
But what does this mean for you?
The stamp duty surcharge will lift each band by 3%.
This means that for properties with the value of up to £125,000, where the stamp duty is 3%, buy-to-let landlords will pay 5%.
For the average buy-to-let purchase of £184,000, that means they will pay an extra £5,520 from April 2016.
|
Stamp Duty Rates |
||
|
Property Value |
Standard Rate |
Buy-to-let/ Second Home Rate |
|
Up to £125,000 |
0% |
3% |
|
£125 - £250,000 |
2% |
5% |
|
£250 - £925,000 |
5% |
8% |
|
£925 - £1.5m |
10% |
13% |
|
Over £1.5m |
12% |
15% |
The increased charge should raise £1bn extra for the Treasury by 2021, up to £60m of this will go to help home-buyers in England.
For more information on buy-to-let, you read our article- The Buy-to-Let Tax: Three Facts You May Not Know.
Figures are sourced from HMRC.
