Increased Stamp Duty rates for Buy To Let Landlords
The Chancellor, George Osborne, delivered another blow to buy to let landlords yesterday with the announcement that buy to let landlords or those buying second homes will face 3% higher stamp duty fees on purchase.
The exact details of this announcement are yet to be released, so it’s unclear exactly how it will operate and the scope of who it will apply to. It may be possible that using a Limited Company ownership structure could avoid the increased charge, however this may require at least 15 properties under ownership to avoid the charge. Commercial property appears to be unaffected.
These changes have come on top of the two other substantial changes announced in the Summer Budget in July 2015, these being the restriction on tax relief on mortgage interest to 20% (being phased in by 2020) and the removal of the Wear and Tear allowance for furnished rental accommodation in April 2016.
Our view:
The Government has completely ignored its goal of tax simplification by creating an increasingly complex landscape for Landlords.
Our advice more than ever is to evaluate, plan and act. Whilst many of the recent changes have been unexpected, those who are prepared and flexible in their approach will be less exposed than those who bury their heads in the sand and do nothing.
In recent months we have helped numerous clients develop a strategy to mitigate their exposure to these changes. Being specialists in the property sector means we are ideally placed to help reduce tax exposure and develop a long term robust strategy for property ownership.
What next?
Please get in touch with Landstar Accountancy to find out more about how we can help…