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The Chancellor may well have backed down on his plan to remove tax credits for working families, but what many people didn’t see coming was an increase in stamp duty for landlords and owners of second properties.
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Landlord organisations are in an uproar following the surprise announcement in the Autumn Statement. The news, which has come as part of George Osborne’s extensive programme to generate funding for new homes, is expected to raise around £1 billion. Unfortunately, this is mostly at the expense of landlords.
Increase in Stamp Duty
From April next year, landlords will have to pay an additional 3% stamp duty on their buy to let properties when they sell them. This makes investment in the private rental sector considerably less attractive says Richard Lambert from the National Landlord’s Association:
“The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.
Mortgage Interest Relief
Landlords are already struggling to come to terms with the reduction in mortgage interest relief, and when you add on the changes made to the annual wear and tear allowance, investing in buy to let property is no longer as profitable as it once was.
“The buy to let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth,” says Stuart Law from Assetz for Investors.
