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In the Autumn Spending Review announced yesterday George Osborne has announced a significant stamp duty increase for Buy to Let and 2nd Home Purchasers. The new tax rate will be introduced in April 2016 and mean Stamp Duty would rise by an additional £3,300 based on purchasing a property for £150,000. The amended stamp duty rates are detailed below;
| Purchase Price | Current Rate | Investors Rate from April 2016 |
| £0 to £40,000 | 0% | 0% |
| £40,000 to £125,000 | 0% | 3% |
| £125,000 to £250,000 | 2% | 5% |
| £250,000 to £925,000 | 5% | 8% |
| £925,000 to £1.5m | 10% | 13% |
| Over 1.5m | 12% | 15% |
The effect that this will have on the amount of Stamp Duty Investors will need to pay is shown in the below figures.
| Purchase Price | Current Rate | Rate from 2016 |
| £100,000 | £0 | £1,800 |
| £125,000 | £0 | £2,550 |
| £150,000 | £500 | £3,800 |
| £175,000 | £1000 | £5,050 |
| £200,000 | £1,500 | £6,300 |
Commenting on the changes Lettings Director, Andrew Sanderson, said “This will clearly have an impact on the Derby Lettings market as it may deter current and potential Landlords from making further purchases. This may also be bad news for tenants as there is already a lack of supply of good quality rental properties so anything that discourages further investment only makes this worse and could in turn mean that rents start to increase. In the shorter term though any Landlords that were looking to buy properties next year now have a very large incentive to act sooner rather than later and compete on their purchases prior to the new rates taking effect in April 2016.
Area Sales Manager, Victoria Downing, continued “We anticipate that the Investment market will be very busy over the next few months. As Derby’s top selling Estate Agent, with offices across the City and a dedicated Sales Progression Department we are ideally placed to help Landlords find and complete on their next Investment Property before the tax increase in April. This extra demand also means that it’s a great opportunity for Home-owners looking to sell to put their properties on the market now.”
For more advice on either Buying or Selling prior to the Stamp Duty increase get in touch with your local branch of Hannells today. Pop in to a local branch or for all the contact details, visit www.hannells.co.uk/contact-us/.