There were not a great many new announcements in the Chancellor’s December Statement.
Many of the changes that will take place in 2016 had already been announced earlier.
Perhaps the biggest surprise was the Government’s strategy to limit the number of properties being taken up by Landlords by announcing an increase in Stamp Duty on second properties and investment properties by 3% (!) from the 6th of April. In our view this will just fuel a four month property boom as landlords buy before the deadline!
Perhaps the biggest surprise was the Government’s strategy to limit the number of properties being taken up by Landlords by announcing an increase in Stamp Duty on second properties and investment properties by 3% (!) from the 6th of April. In our view this will just fuel a four month property boom as landlords buy before the deadline!
To illustrate the effect of this extra 3% tax, we can look at the Stamp Duty on Buy-to-Lets before and after the 5th of April 2016. Our understanding of the application of the Stamp Duty from 6 April looks like this:
Buy-To-Let Buy-To-Let Buy-To Let
Purchase Price Stamp Duty Now Stamp Duty from 6 April
£125,000 nil 3% = £3,750
£200,000 £1,500 5% = £7,500
£275,000 £3,750 8% = £12,000 (average family home)
£510,000 £15,500 8% = £30,800
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