From 1 April 2016 anyone purchasing an additional property will have to pay an extra 3% stamp duty tax.

Buy to let Stamp Duty Changes

BandExisting residential SDLT ratesNew residential SDLT rates as of 1 April 2016 for second homes and buy to let investors£0-£125k0%3%£125,001 – £250k2%5%£250,001 – £925k5%8%£925,001 – £1.5m10%13%£1.5m plus12%15%

Who will pay more stamp duty?

Anyone owning a second property (that is not their main residence) and purchasing another or changing the property (they do not already live in) will likely be affected by the extra stamp duty changes.

Surprises arising from Budget 2016 SDLT….

To assist proposed buyers who may have been hit with delays in the selling process, the government are offering buyers 36 months from 25 November 2015 to apply for a stamp duty refund. To be clear, this change will only apply to those who are selling a main home and purchasing a new one at the same time.

Unfortunately, if you are buying a property with someone who already owns another property you will be subjected to the additional rates – there will be no apportionment for the ‘first time buyer’.

Originally there were talks that individual investors or companies who were buying 15 or more properties would be offered some form of relief. However, this is not the case, there is no exemption for large scale purchases or portfolio investors.

The budget allows for capital gains to be reduced from 28% to 20% for higher rate taxpayers and reduced to 10% for lower rate taxpayers (residential property has been excluded from this). Buy to let and second home owners have been deliberately excluded from the capital gains cut.

It has been speculated that the chancellor’s aim is to tackle the housing shortage and that the receipts from the extra stamp duty would be put towards community housing trust projects.

 SDLT on leases….

From 1 April 2016, there will also be a new 2% rate for high value leases with a net present value above £5 million.

 Are the stamp duty changes going to have an impact on buy to let investors?

Buy to let landlords, whether a company or an individual, are usually investing for long term. With this in mind, as a buy to let investor with a portfolio the new tax changes are not likely to make a big impact given that they would be well established and the rents would go up long term.