In a controversial move, the Chancellor of the Exchequer, George Osbourne, announced in last autumn’s budget statement that buy-to-let landlords and purchasers of second homes will be forced to pay an extra 3% in stamp duty on property purchases from 1st April 2016, a move intended to take the heat out of the housing market and help first time buyers.
It has been described as catastrophic news for the private rented sector by David Cox, Managing Director of the Association of Residential Letting Agents (ARLA). Property experts have warned that the move could distort the housing market, with a rush of buy-to-let and second home purchases before the start of April 2016.
This is set to affect more than just property investors, according to the consultation recently published by the Government. People had until 1st February to give their reaction to the consultation and hidden in the document were a number of issues that could affect ordinary people buying and selling who are not looking for a second home or even looking to rent out a second home.
One issue was that the additional 3% rate is intended to apply where a purchaser owns more than one residential property at the end of the day of the transaction. So, if the old home is sold secondly, the surcharge will be payable upon the transaction with the ability to recover the amount afterwards!
It has already been revealed it will take some weeks for officials to go through the replies so the final details are unlikely to be made public until the Budget on 16th March. With the new tax set to take effect on 1st April it means that many purchasers will be exchanging contracts without knowing what the final rules will be.
We can guide you…
We have noticed the buy-to-let market bubbling as a reaction to this news with many landlords hoping to complete a purchase prior to the new legislation being in place. We are well placed to react quickly to change and our experience and qualifications allow us to advise landlords on the best personal choices for them. We can guide you through the process from the selection of the right property through to completion of the purchase and letting the property. You may also choose to purchase a property that requires work but are not confident to manage a refurbishment program yourself.
We have a team of experienced architects and surveyors who can assist you. If you chose to sell at the end of the process or were merely interested in the increase in value achieved, our sales team would be happy to help. Of course the end goal would be to let the property and find suitable tenants. At Sheldon Bosley we pride ourselves in our Property Management process and currently let and manage in excess of 1000 properties that are rented out for residential use, and as such would be more than happy to look after your rental property.
As you can see Sheldon Bosley are able to offer the ‘whole package’ and ensure your capital investment is safe.