MSE News: Autumn Statement 2015: Stamp duty hike on buy-to-let and second homes

_CC_

AndyBSG wrote: »

No, because you'll be getting a standard mortgage, this only applies to those getting BTL mortgages.

That said, i'm not sure if/how they will apply this to LL's who are buying a property for cash without a mortgage?

It applies to all second homes and BTL, nothing to do with the mortgage. If you're a cash buyer you'll still incur the higher stamp duty rates.

silvercar

Does it apply to companies buying residential property?

And if it does, does it apply to the first property that the company buys?

_CC_

silvercar wrote: »

Does it apply to companies buying residential property?

And if it does, does it apply to the first property that the company buys?

https://www.gov.uk/government/publications/main-tax-announcements-for-autumn-statement-2015/main-tax-announcements-for-autumn-statement-2015#stamp-duty-land-tax-sdlt--and-capital-gains-tax-cgt

Higher rates of SDLT will be charged on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes, from 1 April 2016.
The higher rates will be 3 percentage points above the current SDLT rates. The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.
The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.

Given the language, I'd suspect it will also apply to those who hold the properties within a limited company (it seems to suggest the exception may be companies and funds with large holdings, not your run of the mill landlords)...?

Pincher

Pretty clear to me, second home gets the stamp duty increase, too.

For capital gains, they allow an overlap, so you can sell the first house later, but still pay no capital gains. About 18 months, I think.
So you probably get an overlap here, too.

AdrianC

silvercar wrote: »

Does it apply to companies buying residential property?

There were already different SDLT rates for businesses buying residential properties - a few exceptions, including lettings businesses, but 15% on £500k+

wastedtalent

Actually, thinking about it. Buying a house to move into doesn't make that house a second home or a buy to let, as it would be your primary residence. In which case i cant see you would need to pay the extra if you either move then sell or let out your existing residence.

Brown_Eyed_Girl

Sounds like they are working out the details before it kicks in next April.

Won't this just encourage people who were thinking about buying another property or BTL to do it in the next 4 months before it kicks in? i.e will there be another burst of activity in the market like last year?

Dird

wastedtalent wrote: »

Actually, thinking about it. Buying a house to move into doesn't make that house a second home or a buy to let, as it would be your primary residence. In which case i cant see you would need to pay the extra if you either move then sell or let out your existing residence.

Land Registry currently says he owns one property. Soon it will say he owns 2. To me it's a 2nd home so he pays the extra stamp duty...but while he lives there he won't have to pay the CGT.

Personally I think the LL taxes are a good thing (as someone who was thinking of getting a BTL in London in 5 or so years time). I'm against the free loan increase as I doubt it will help with the prices. No opinion on the housing association RTB although it would have been better if it was replacing the council house RTB scheme.

Pincher

Brown_Eyed_Girl wrote: »

Won't this just encourage people who were thinking about buying another property or BTL to do it in the next 4 months before it kicks in? i.e will there be another burst of activity in the market like last year?

Hope so, bl**dy good time to sell. :j


It's the end of the MIRAS double tax relief all over again.

MJ12

Brown_Eyed_Girl wrote: »

Won't this just encourage people who were thinking about buying another property or BTL to do it in the next 4 months before it kicks in? i.e will there be another burst of activity in the market like last year?

Yes I think it will. Hong Kong did this. 2X stamp duty on all second homes and on homes bought by foreigners. People were rushing to complete before midnight the day before the policy kicked in on 22 February 2013. It was on the news.

After this, landlords were reluctant to sell their properties because they would have to pay double stamp duty if they ever buy back.

Back to the UK, I wonder if this extra 3% applies to foreign individuals buying their first property in the UK to let.

Also, if it applies to limited companies. If so, then surely one can create a company per property then have a parent company owning them all.

In any case, this is just a one off fee, so I think the impact on the profitability of a BTL in the long term would be limited.