Partner and Head of Wills & Estate Planning at Andrew & Co Solicitors Helen Newson writes...
The Effect of the Autumn Statement on Landlords
- AuthorJoanne Sworder
The Chancellor announced measures in the Autumn Statement which will particularly affect the rental sector. New Stamp Duty thresholds were announced for purchasers of additional residential homes, which will include buy-to-let properties. From 1st April 2016, the Stamp Duty charged on these properties will increase to three per cent above the current Stamp Duty rates.
In addition Stamp Duty will become chargeable from £40,000, rather than £125,000. 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. The government will consult on the detail, including whether corporates and funds owning more than 15 residential properties should be exempt.
It was described as “catastrophic news for the private rental sector” by David Cox, Managing Director of the Association of Residential Letting Agents (ARLA). He also said that increasing tax for landlords will increase rents and reduce property standards for tenants, but that remains to be seen.
This isn’t the only tax announcement affecting landlords however. The Capital Gains Tax window will be reduced from April 2019, meaning that Capital Gains Tax will need to be paid within 30 days of completion of any disposal.