In recent years buy-to-lets have become increasing popular with seemingly everyman and his dog looking for a piece of the action, but the Autumn Statement contained a slap in the face for potential buy-to-let Landlords.
Following on from his shock announcement earlier in the year that higher rate tax relief on interest on buy-to-let borrowings would be phased out, he announced on Wednesday that a new 3% Stamp Duty (SDLT) surcharge on top of existing SDLT rates would apply to second homes and buy-to-let properties from April 2016.
As yet we believe that the new rules will not apply to corporates letting at least 15 residential properties. Presumably the detailed rules will include some relief for builders, property developers and anyone looking to buy a property to improve it before selling it on.
The Chancellor has certainly decided to make second property ownership less attractive and we may see some increase in property prices in the short term as potential investors seek to sign on the dotted line before the new rules apply. Whether the extra 3% will deter serious investors who are in for the long term only time will tell, but anything that slows the market will inevitably make home owners feel less prosperous and that may have detrimental effects on the economy more generally.
If you have any questions on buy-to-let or property taxation matters please contact myself or one of our expert tax team.