One significant tax announcement in the Chancellor’s Autumn Statement was the plans to further increase the tax burden on those planning to buy additional homes in the UK.
From April 2016, a surcharge will be added to all Stamp Duty rates for residential property, where the purchaser already owns one ore more UK properties. The stamp duty surcharge will lift each band by 3%. For instance, properties worth between £125,000 and £250,000 currently attract stamp duty of 2%, but the changes mean those with more than one property will pay 5%.
It is not yet clear how a second home will be defined and exactly who will be caught. For example, married couples may only be entitled to one home as they are likely to co-own their existing property.
But the measures will definitely hit buy-to-let landlords who are looking to expand their property portfolios. In addition to the stamp duty changes, buy-to-let landlords will also see tax relief restricted for mortgage interest from April 2017.