The Chancellor in his Autumn Statement, stated that ‘more and more homes are being bought as buy to lets or second homes’ and ‘frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy’.
With this in mind the Chancellor announced higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes, from 1 April 2016. The higher rates will be 3% above the current SDLT rates. The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property. The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.
The question on all landlords, investors and agents minds at the moment is “will this affect the Buy to Let market?”
We do not believe so. The rental market is still strong and increasing the SDLT will not affect the need for people to rent. Whilst landlords purchasing a buy to let may not be happy with the Chancellor’s increased tax, we do not believe it will affect the need for tenants to rent.