Budget 2016 - a blow to large-scale landlords
In his first Budget for 2016, the Chancellor has dealt a blow to buy-to-let landlords who own fifteen or more properties as they are now liable to pay the 3 per cent stamp duty that had previously been reserved for smaller and accidental landlords.
Responding to the Chancellor's Budget, Preston Baker's Managing Director Ian Preston said, "It has always seemed incredibly unfair that a couple renting out their first home to buy a second property had to pay stamp duty, whilst large-scale landlords were exempt.
This latest change has removed the loophole that allowed buy-to-let investors club together to buy multiple properties through a company to avoid extra tax.
We expect the increased taxation will reduce the supply of private residential property as follows:
- New landlords are put off from entering the market
- Existing landlords will be subject to increased taxation due to the decrease in the amount that higher rate tax payers can offset from their mortgage costs on buy-to-let property.
This reduced supply will have the knock-on effect of higher rents for tenants - which everyone is agreed is not a good thing.
The only silver-lining from these stamp duty changes is that less competition in the market from landlords on less expensive property should in fact give more opportunity to first time buyers to enter the sales market."
- First-time buyer? Read our guides on buying property.
- Interested in buy-to-let? Read our guides for landlords.