From 1st April 2016, anyone purchasing a second property will be liable to pay an extra 3% stamp duty.
To avoid this increase, buy-to-let landlords currently looking to increase their portfolio must complete the purchase before midnight on 31st March 2016.
As an example, if you are purchasing a buy-to-let property for £200,000, you will currently pay £1,500 stamp duty. However, from 1st April, this cost will rise to £7,500. This is based on 3% tax on the first £125,000 of the purchase price, and 5% of the remaining amount.
While the government has introduced these changes to help first-time buyers currently struggling to get on the property ladder, the prices of investment-friendly properties could be falsely inflated over the next few weeks because of the rush to meet the 31st March deadline.
Likewise, buy- to-let landlords may have to hike up rental costs to cover the additional stamp duty, inflating rents in the private rental market.
If you’re looking to complete the purchase of a buy-to-let property on or before the 31st March 2016, the commercial property team at Linder Myers can help.Contact us