3% Stamp Duty

21 December 2015

We at Estateology will advice BTL investors to exchange and complete on any proceeding or anticipated property purchases before April 2016 as:

Following the announcement of special “landlord” stamp duty tax rates Buy-to-let investors will pay thousands of pounds extra in tax when they buy a property following the announcement of special “landlord” stamp duty tax rates this rule would come into action from April 2016.

Stamp duty rates will be three percentage points higher meaning the tax bill on a buy-to-let property costing £250,000 will jump from £2,500 to £8,800. More examples are in the table below.

The same increased stamp duty rate applies to buying other second properties, such as holiday homes, in which the owners do not intend to live full-time.




It is estimated that the extra stamp duty will help raise almost 1 billion pounds by 2021.  It is believed that  some of the money will be reinvested in local communities in London and places like Cornwall which are prices out of home ownership.

Not only will prospective landlords have to pay far more than conventional residential buyers, they also face much heavier taxes on their profits. The maximum tax relief will drop from 45% and 40% to just 20%, so that an investor with a £150,000 buy-to-let mortgage on a property worth £200,000 is likely to see his or her net annual profit collapse from £2,160 a year to just £960.

The new tax legislations may cause an initial spike in the house prices as investors will rush to buy.  is likely to cause initial spike in house prices as investors rush to buy. As a result the rental market may also see a significant increase in the prices as landlords will  naturally seek to recover the new tax charges .  However it is difficult to predict the long term effect.www.thisismoney.co.uk