The last twenty five years has seen enormous growth in the UK’s housing market. Part of the driving force behind the growth in this sector has been the increased demand, partially driven by a growing ‘buy to let’ sector.
With supply lagging far beyond demand from an increasing population, the UK Government have been keen to discourage the small private buy to let investor. From 1. April 2016, anyone purchasing an additional buy to let property must pay at least an extra 3 per cent in stamp duty land tax.
The Treasury has tried to close any loopholes to get around extra stamp duty charges. The changes apply to companies and individuals no matter how many properties you are purchasing.
Property Price | Surplus SDLT Rate |
Up to £40,000 | 0% |
Over £40,000 and under £125,000 | 3% |
Over £125,000 and under £250,000 | 5% |
Over £250,000 and under £925,000 | 8% |
Over £925,000 and under £1,500,000 | 13% |
Over £1,500,000 | 15% |
For example, prior to April 2016, anyone buying a £200,000 second home or buy to let, paid stamp duty of £1,500. This was based on paying zero per cent on the first £125,000 of the property value and 2 per cent on the portion between £125,001 and £250,000.
From April 2016, landlords had to pay 3 per cent for the first £125,000 and 5 per cent instead of 2 per cent on the amount between £125,001 and £250,000. This could give them a total bill of up to £7,500.
Click here for non Buy to Let Stamp Duty Rates.
However, it’s not just buy to let landlords who have been hit but anyone buying a second home. This even extends to parents buying a property for their children, or a couple purchasing a home together where one is already a homeowner.
Those purchasing a buy-to-let and second homes face the charge, but so do others.
Anyone owning a second property that isn't their main residence and buying another, or replacing the one they don't live in, is also likely to get caught up in the extra tax.
There are a variety of SDLT calculators on the internet.
10 days ago
If you are looking at remortgaging your property but you are unsure whether it’s the right decision, we have listed five reasons why it might be for you.
17 days ago
As the cost-of-living crisis continues, many people across the UK are struggling financially, many of whom are finding it hard to get debt-free.
According to research by StepChange, there are five common reasons people don’t seek help and advice with debt concerns.
6 Feb 2024
Every Friday our experts search the market for the latest rates from every lender saving our clients some serious £'s!
2 Feb 2024
Are you looking to extend your property? There are many benefits to adding an extension to your existing home, here are a few.
30 Jan 2024
Put simply, Equity Release is where you can release equity (money) tied up in your home for any purpose you like. In this short article, we share some reasons why you may want to consider Equity Release.
17 Jan 2024
The team at Mortgage Required may not be able to lower the prices in your local supermarket, but we have come up with a list of tips to help you lower your food shopping bill.
14 Jan 2024
Every year Big Energy Saving Week takes place to raise awareness about energy efficiency, reducing energy bills, and combating fuel poverty. Below are some ways you can get involved and hopefully make a saving!
12 Jan 2024
In this blog we look at what happened in the housing market in relation to house prices last year, and look ahead at the forecast for 2024.