Landlords are set to be hit with an EXTRA 3% stamp duty.

10th February 2016

By Tony Ourris

Buy-to-let landlords are set to be hit with new costs from April when a controversial extra 3 per cent stamp duty charge is introduced. The change, which aims to free up housing for buyers, will add thousands to buy-to-let property transactions. 

The buy-to-let sector has long-been a controversial part of the property market, with critics blaming landlords for pushing up property prices and keeping first-time buyers locked out.

Chancellor George Osborne has turned his attention to landlords in recent budgets and spending reviews.

First he announced reductions in mortgage interest relief from 2017, but before that landlords are set to be hit with an extra 3 per cent charge on each stamp duty rate band, which vary by property value.

An additional 3 per cent may not sound like much but let’s take a look in black and white

For example, anyone buying a second property valued at £200,000 would end up paying five times more than a private purchaser and it is not just landlords that will be hit but anyone owning a second home. This could be parents buying a property for their children, a UK holiday home or a couple purchasing a home together where one is already a homeowner.

The government will treat married couples and civil partners living together as one unit. This means any homes owned by either partner will be included when the stamp duty bill comes due on the purchase of another property. An individual buying a property may be liable for the higher rates if his or her spouse or civil partner has an existing residential property. 

If someone is purchasing their first or only property in England, Wales or Northern Ireland, and they already own a property abroad, they may have to pay the higher stamp duty rate. This would also apply to a foreign homeowner buying in Britain, a Briton with a holiday home, or someone who owns a Scottish property.

So what is exempt?

There are some types of property that won't fall under the stamp duty charges. These include:

·         Caravans and houseboats 

·         Anyone owning a caravan, mobile home or houseboat currently doesn’t have to pay stamp duty.

·         Property worth less than £40,000  

·         Charities and registered social landlords will continue to be excluded from the stamp duty changes.

·         Multiple purchases  

·         The government is proposing to exempt companies already owning 15 properties from the extra stamp duty. These owners may be corporates, funds or significant investors boosting the nation's housing stock.

If you are a local landlord in Plamers Green or Southgate and require any assistance or advice please do not hesitate to contact a member of our team. We can help with all aspects of letting and managing your property.