Chancellor George Osborne landed buy-to-let landlords another shock today by announcing a 3 per cent stamp duty surcharge on property purchases from 1 April 2016.
The addition of a 3 per cent extra charge for buy-to-let and second homes on all stamp duty bands above a £40,000 starting level will almost treble the bill for buying a £275,000 home – hiking it from £3,750 to £10,800.
WHAT STAMP DUTY MEANS FOR LANDLORDS BUYING £275k HOME |
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Currently, buyers pay no stamp duty on the first £125,000, then 2 per cent on £125,000 to £250,000 and 5 per cent above £250,000 to £500,000, rates continue to step up above this. For those buying a buy-to-let property or second home, stamp duty will now be 3 per cent on homes between £40,000 and £125,000, 5 per cent to £250,000 and 8 per cent to £500,000. For those snapping up a £275,000 home, the current rate of stamp duty means a £3,750 stamp duty bill. This is worked out by: 0% on the first £125,000 = £0 2% on the next £125,000 = £2,500 5% on the final £25,000 = £1,250 Total SDLT = £3,750 But adding the 3 per cent surcharge will see the price of the tax rocket for landlords. 3% on the first £40,000 – £125,000 = £2,550 5% on the next £125,000 = £6,250 8% on the final £25,000 = £2,000 Total SDLT = £10,800 |
